𝗙𝗢𝗟𝗟𝗢𝗪𝗜𝗡𝗚 𝗙𝗟𝗢𝗪𝗦 𝗩: 𝗣𝗢𝗢𝗟 𝗖𝗥𝗢𝗦𝗦-𝗣𝗢𝗟𝗟𝗜𝗡𝗔𝗧𝗜𝗢𝗡
In today's @coinmetrics State of the Network, we examine on-chain flows b/t mining pools and their counterparties, uncovering hidden links to help assess the true degree of mining decentralization 🔍





Any proper mining pool analysis starts with the "0-hop" and "1-hop" heuristic.

0-hop addresses (typically pools) are the direct recipients of new BTC issuance, while 1-hop addresses (typically miners) are any address linked to pools by at least 1 outflow.

1/ With a turbulent 2022 in the rear view, #Bitcoin miners are on the retreat. After tipping ~265 EH/s last month, hashrate has tumbled -6% 📉

In response, we saw a massive -7.3% network difficulty adjustment, the largest downtick since the Chinese miner exodus of summer '21. 2/ Still, miner margins have been compressed all year, so the burst of hashrate in late Q3 is a bit mysterious.

One theory offered by @Data_Always is that miner rackspace was rapidly reallocated from GPUs to ASICs in the wake of the Ethereum Merge.