Can the two biggest bitcoin mining pools lock out all others?

Question

I just noticed that the two biggest bitcoin mining pools already have more than 52.5% of the hashing power (as of 11/12/23 Foundry USA had 27,7% and AntPool 24.88%) and am wondering about the consequences of this. Is it true that if they decide to cooperate and only continue blocks produced by themselves or the other pool, that nobody else could ever again squeeze in a block sideways, because they will always produce a longer chain that will invalidate anything the others do, or am I missing something?

If so, could the others do anything about that? Finding out who created a block is probably not quite possible if they don't want you to and distribute the new blocks over their members, right?

UPDATE: I'm especially interested in what would technically happen if they do that and the hash rate relationship continues for a while. I'm aware that there are human factors in this - e.g. their miners could move to other mining pools if they think they've turned evil. But that could also play out the other way around - if, e.g., governments would try to take control and explicitly order the pools to do that for some real or pretended reason. And if my hunch is right, they would be the only mining pools who were able to make any profit, so there would be a big incentive for miners to move into these pools. But that's just an example - the point of my question is especially what would / could technically happen, as the human factor is rather speculative.

Answer 1

It's certainly not an ideal situation. However them cooperating to censor outsiders' blocks doesn't make it impossible for anyone else to "squeeze in a block" ever again. In order to prevent anybody else from mining a block, they need to keep maintaining a majority of the hashrate. They can't prevent another miner from challenging them.

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To answer your UPDATE. As long as they maintain a majority hashrate they can indeed continue reorg'ing out blocks from other pools. You are right that in this case they would be the only ones able to claim block rewards. But an underlying assumption in discussing an evil hashrate majority is that they would censor transactions: otherwise there isn't much harm to users of the system.

In this case they would necessarily have to give up on the fees of the censored transactions, that other block producers would presumably include. Also note how as the block subsidy decreases and transaction fees become a larger part of the block reward the opportunity cost for a censoring 51% attacker increases.

Answer 2

A mining pool (or several cooperating mining pools) can only prevent others from mining if they maintain a majority of the hashrate. That can only happen if miners continue mining with them. Since miners can switch pools very easily and they probably don't want to participate in an attack on the system they're heavily invested in, it's not an unreasonable assumption they'd leave the pool. We've seen a mass miner exodus last year when Poolin had a liquidity crisis, and about 80% of its miners left within a few weeks.

It's also unlikely a mining pool could launch such an attack in secret. All mining pools currently label their blocks, so if anyone stopped it would immediately be suspicious. Even if that weren't the case, (at least some) miners in a pool necessarily know which blocks are mined by that pool, so there's really no way to keep that a secret for very long.