The emergence of Bitcoin introduced blockchain technology, and the idea of cryptocurrencies, to the world. A currency that owes no allegiance to any government or financial institution attracted many, and the idea of a fully decentralized in all aspect of its operations was new and compelling.
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A significant process that keeps the network in operation is term as Mining, it is the backbone of the network. Those who have the required hardware and computing power that makes the process achievable is known as Miners. Without miners, the network would be attacked and defective.
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It is based on difficult mathematical problems called Proof of Work (PoW). Miners have to calculate the return on investment based on hardware and the cost of electricity and other resources needed to perform the process.
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Considering Bitcoin mining requires highly specialized computers and high energy consumption, miners that cannot afford these faster and powerful ASICs or electricity usually do not have a better chance of mining. This gives mining power to a few firms and well-funded people.
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For example, researchers claim China is the “Most Powerful Adversary to Bitcoin”. The study estimate that “about 74% of the hash power on the Bitcoin network is in Chinese-managed mining pools,” and examine how this centralization of mining power can easily be leveraged by the Chinese government to influence the network.
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If the first Proof of Work (PoW) consensus in Bitcoin was to be a guarantee of network decentralization, it is not. We all remember that Chinese companies reduced BTC mining because more than 54% of computing power is concentrated and centralized in their region, which leads to a violation of the decentralization principle.
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The creation of BTC Ultimatum (BTCU) is a fix to Bitcoin mining centralization. It is developed switching to an improved LPoS algorithm (combined with PoA) by implementing the BTCU backed consensus - UPoS - as the alternative technical and decentralized solution that fit all the elements of the modern blockchain community.