The Fifth Halving and the Hollowing of Decentralization: Why Bitcoin's Consensus Is Becoming a Triopoly

We celebrate the fourth halving as a triumph of scarcity, yet the very mechanism that ensures Bitcoin's monetary policy is quietly eroding its foundational promise. In the months following the April 2024 block reward reduction, a cold structural reality has emerged: the three largest mining pools—Foundry USA, Antpool, and ViaBTC—now control over 65% of the global hash rate. For a network designed to resist capture, this concentration is not a minor anomaly; it is a slow-motion failure of the very consensus architecture that once made Bitcoin a sanctuary from centralized power. I recall writing in 2020, during the third halving, that the reward reduction would eventually force marginal miners out, but I did not anticipate how quickly the remaining power would coalesce into a de facto triopoly. The numbers are stark: according to data from BTC.com and Mempool.space, the top three pools have maintained a combined share above 60% for the past eight months, with occasional spikes above 70% during periods of network congestion. The fourth halving—the one we just passed—was supposed to be different. The narrative was that improved efficiency and institutional adoption would sustain a more distributed mining landscape. Instead, the opposite has occurred, and the implications for Bitcoin's long-term resistance to censorship and state-level control are profound. To understand why this centralization is deepening, one must examine the economics of post-halving mining. The block subsidy dropped from 6.25 to 3.125 BTC, instantly slashing the revenue of every miner by half. Transaction fees, which had briefly surged to over 30% of total miner revenue during the Ordinals inscription frenzy in early 2023, have since stabilized at a mere 5–10% of the total. This means that for the vast majority of mining operations, the path to profitability runs through economies of scale—cheaper electricity, access to the latest ASICs, and favorable pool fee structures. Smaller miners, especially those operating in regions with unstable power grids or high regulatory friction, were the first to capitulate. Many sold their hardware to larger operators or joined pools that offered predictable payouts through pooled mining contracts. The result is a self-reinforcing cycle: larger pools accumulate more hash power, which allows them to offer lower fees and more stable payments, which in turn attracts more miners, further concentrating the network. During my 2022 bear market audit of L1 protocols, I spent six months analyzing the security models of failing networks, and I observed a pattern that now applies to Bitcoin: the concentration of hash power is not merely a statistical curiosity; it is a governance vulnerability. When a small number of entities control the majority of the hash rate, the concept of 'decentralized consensus' becomes a procedural fiction. The pools themselves are not neutral service providers—they are corporate entities with their own incentives. Foundry USA is owned by Digital Currency Group (DCG), the same parent company that owns Grayscale and Genesis, and has been actively involved in regulatory lobbying. Antpool is operated by Bitmain, whose co-founders have a history of political entanglements in China. ViaBTC, while more independent, is still a Chinese-registered company with close ties to the Bitmain ecosystem. The risk is not that these pools will suddenly attempt a malicious 51% attack—that would destroy their own value—but that they will quietly comply with government sanctions or regulatory demands to censor specific transactions. We have already seen this happening: in 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash addresses, and several major Ethereum validators began censoring blocks. Bitcoin miners, too, are under increasing pressure to comply with KYC/AML rules, and the infrastructure for transaction filtering is already in place at the pool level. The triopoly structure means that if any two of the three pools agreed to block a transaction, it would effectively be excluded from the blockchain for hours or days. Some argue that the threat of pool centralization is exaggerated because miners can switch between pools at will, and the pools themselves are merely aggregators of many independent participants. This is technically true, but it ignores the economic realities of the post-halving landscape. The majority of miners in the three largest pools are not individual hobbyists running home rigs—they are industrial-scale operations that have signed long-term contracts for hash rate, often with lock-in periods and volume discounts. The switching cost is not zero; it involves reconfiguring firmware, updating mining software, and potentially losing the advantage of co-location with pool servers. Moreover, the pools themselves have become increasingly sophisticated in their ability to enforce compliance. For example, Antpool requires miners to provide identity verification for certain payout tiers, and Foundry has implemented a 'white-list' of known addresses for block rewards. This is not the open, permissionless mining ethos that early Bitcoiners envisioned. The network's security still relies on the honest majority assumption, but when the majority is concentrated in three corporate entities, that assumption becomes a bet on the benevolence of a few key executives. Beyond the immediate security concerns, the concentration of hash power has a subtler but equally corrosive effect on Bitcoin's governance. The possibility of a fork—either a hard fork to change the monetary policy or a soft fork to introduce new features—depends on the willingness of miners to signal support. With a triopoly, the decision to adopt a new consensus rule is effectively determined by three CEOs sitting in conference rooms. The community's voice, which once was expressed through messy, grassroots debates on forums and IRC channels, is now mediated by the commercial interests of these entities. I witnessed a similar dynamic during the Ethereum Classic narrative shift in 2017, when I translated technical whitepapers for Spanish-speaking newcomers. The 'Code is Law' principle was supposed to be a safeguard against human intervention, but in practice, the decision to implement a change or not was always made by a handful of miners and developers. The same is happening to Bitcoin, only now the decision-makers are fewer and more centralized. There is a contrarian view that deserves consideration: perhaps this centralization is a natural and even beneficial evolution. Large mining pools bring stability, professional management, and the ability to invest in cutting-edge infrastructure. They can negotiate better energy deals and improve the overall efficiency of the network. The triopoly might even be better for security in the short term, because each pool has a strong incentive to protect its reputation and investment. But this perspective ignores the fundamental principle that Bitcoin's value proposition is its trustlessness. If we accept that the network's security ultimately depends on the goodwill of three corporations, then we have moved from a trust-minimized system to a trust-optimized one. The difference is not trivial: trust-minimized means that no single entity can stop the system from functioning; trust-optimized means that the system works as long as the entities are honest. The latter is indistinguishable from a traditional banking cartel from a cryptographic standpoint. The soul of Bitcoin—the reason it exists—is the elimination of the need for trusted third parties. To accept the triopoly is to abandon that soul. In the bear market of 2026, survival matters more than gains. The question for every Bitcoin holder is not whether the price will recover, but whether the network's foundational security is eroding in a way that will eventually be exploited. The data from the fourth halving suggests that the concentration of hash power is not a temporary blip but a structural shift. The smaller miners are bleeding; the pool operators are consolidating. The next halving, expected in 2028, will reduce the subsidy to 1.5625 BTC, putting even more pressure on the ecosystem. If the trend continues, we could see a situation where two pools—or even one—control the majority of the hash rate. That would be the end of Bitcoin as we know it. The network would still function, but it would be a permissioned system in disguise. The code would still run, but the soul would be gone. We chart the code, but the soul chooses the path. The path we are on now leads to a future where Bitcoin's resilience is not a matter of mathematics but of corporate policy. The question is whether we, as a community, are willing to accept that trade-off, or whether we will act to preserve the decentralized vision that made this experiment worthy of our attention in the first place. Permanent records for temporary emotions—the blockchain cannot forgive, but it also cannot forget. The history of this centralization will be written indelibly, and future generations will judge us by whether we allowed it to happen or fought against it. I have seen this pattern before, in the collapse of other L1 protocols that started with idealistic promises and ended with a handful of nodes controlling the ledger. The difference is that Bitcoin has the brand, the liquidity, and the inertia to survive for a long time even as its core principle erodes. But the erosion is real, and it is measurable. The hashrate is growing, but the distribution is shrinking. That is the paradox of the fourth halving, and it is a paradox that we must resolve before it resolves us. Let me be clear: the technical mechanisms to address this centralization exist. Stratum V2, for example, allows miners to choose their own transaction templates even when connected to a pool, reducing the pool's ability to censor. But adoption has been slow—less than 5% of the network uses Stratum V2 as of mid-2025. The largest pools have little incentive to adopt it, because it would weaken their control over the block content. The community must push for this adoption, not through moral persuasion but through economic pressure. Exchanges and wallet providers could refuse to accept blocks from pools that do not support Stratum V2, or users could start using mined blocks that are more decentralized. The technology is there; the will is not. During my time working on the soul-bound token project for Mexican indigenous heritage, I learned that technology alone cannot preserve culture—it requires active, conscious choice from the community. The same is true for Bitcoin's decentralization. The code is not self-executing. The consensus is not automatic. The preservation of decentralization is an ongoing effort, not a one-time achievement. We also need to acknowledge the role of institutional investors in this centralization. The same institutions that bought Bitcoin through ETFs and custodial services are the ones that finance the mining pools. They are not evil; they are seeking returns. But their incentives are aligned with stability and predictability, not with ideological purity. They want a Bitcoin that is compliant, that can be integrated into traditional finance, that does not threaten the existing order. This is not a conspiracy; it is the natural outcome of capital flowing into a system that was designed to be resistant to it. The irony is that the very success of Bitcoin—its adoption by mainstream finance—has become the greatest threat to its foundational promise. The soul of the network is being traded for liquidity, and few are willing to admit that the trade is happening. As I write this, I am reminded of the words I wrote in 2021 during the NFT soul-bound identity project: 'The contract executes. The conscience judges.' The contract of Bitcoin's consensus is executing as designed, but our conscience is asleep. We are allowing the triopoly to form because we are distracted by price charts and regulatory news. The real story of the fourth halving is not the scarcity of supply—it is the scarcity of decentralized power. The hash rate is abundant, but the power behind it is concentrated. That is the story we should be telling, and that is the battle we should be fighting. In the end, the question is not whether Bitcoin will survive the triopoly. It will, because the network is robust and the incentives to keep it running are strong. The question is whether it will survive as a permissionless, trustless system, or whether it will evolve into a hybrid that is ultimately controlled by a few powerful entities. The answer is not yet written. It depends on the choices we make today. The code will continue to run, but the soul will choose the path. Let us choose wisely.