Miners pool their hashpower together to reduce payout variance. The larger the pool, the lower the variance, which unfortunately incentivizes centralization. Today, over 50% of the total hashrate is directed to just 3 mining pools. How much of a problem this really is is of course debatable.

However, couldn't miners reduce variance even further by frequently switching pools, say multiple times per minute, in order to get a share of most mined blocks? Shouldn't this incentivize decentralization? Why aren't miners doing this?


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.