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Maximizing Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC</a>) decentralization throughout the entirety of the stack is a matter of national security, Rajiv Khemani, co-founder and CEO of mining chip manufacturer Auradine, told Cointelegraph.
The CEO explained that third-party firmware — which updates and changes over time — could theoretically be used to compromise the energy grid or launch a 51% attack on the Bitcoin network.
Auradine’s CEO outlined a potential situation where malicious code embedded within this firmware could shut down mining operations within a certain geography. This could cause a drop in hashrate and network difficulty, making <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/what-is-a-51-attack-and-how-to-detect-it" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/what-is-a-51-attack-and-how-to-detect-it">a 51% attack</a> easier to execute.
<figure><img alt="Mining, China, Decentralization, Bitcoin Mining, United States, ASIC, Mining Pools, Energy" src="https://s3.cointelegraph.com/uploads/2024-10/01925926-f3ce-7a8e-8c84-db266fa71964" title="">
 <figcaption style="text-align: center;">
 Bitcoin network hashrate. Source: CryptoQuant
 </figcaption>
</figure>
Khemani stressed the need for caution when evaluating hardware and software from foreign entities:&nbsp;&nbsp;
<blockquote>
 "Anytime you have hardware, software, and firmware from a foreign entity connected to your energy infrastructure — which is what Bitcoin has essentially become — you have to make sure that you are doing the proper due diligence and risk mitigation."
</blockquote>
Another attack vector is supply-chain risk, the CEO said during the interview. If highly specialized mining hardware like application-specific integrated circuits (ASICs) are overwhelmingly manufactured in a single jurisdiction then that country can restrict the export of those products at any time — leaving miners without access to the crucial technology.
“There’s not many ways to spy or steal coins” though mining hardware, the Auradine executive said, dispelling an earlier <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/foreign-crypto-miners-could-be-spying-us-military-bases-elizabeth-warren" rel="noopener noreferrer nofollow" target="null" text="null" title="null">claim made by US Senator Elizabeth Warren</a> that foreign crypto miners could spy on US military bases. The reason for this is that mining hardware does not feature robust memory or surveillance capabilities, the CEO told Cointelegraph.
Khemani concluded by arguing that the United States should enforce policies that encourage the domestic manufacturing of ASIC hardware and that no one country should control a majority of the total hash power or hardware supply.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/miners-ideal-energy-consumers-regulators-catch-up-hive" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC miners are ideal energy consumers, but regulators need to catch up — Hive</a>
<h2 id="geographic-hashrate-distribution-raises-concerns">Geographic hashrate distribution raises concerns</h2>
The Auradine CEO isn’t the only one who has sounded the alarm about hashrate concentration and mining pool centralization.
In May 2024, it was reported that just two mining pools — AntPool and Foundry — <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/big-bitcoin-miners-growing-threat-bitcoin" rel="noopener noreferrer nofollow" target="null" text="null" title="null">controlled more than 50%</a> of the network hashrate.
<figure><img alt="Mining, China, Decentralization, Bitcoin Mining, United States, ASIC, Mining Pools, Energy" src="https://s3.cointelegraph.com/uploads/2024-10/01925927-91d0-74b5-adee-f6a90e42c720" title="">
 <figcaption style="text-align: center;">
 Hashrate distribution by mining pool. Source: HashRateIndex.com
 </figcaption>
</figure>
Later, in September, CryptoQuant founder Ki Young Ju noted that Chinese mining pools <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/chinese-bitcoin-miners-control-55-of-network" rel="noopener noreferrer nofollow" target="null" text="null" title="null">accounted for 55% of the hashrate</a> — an assertion that was met with debate.
According to TheMinerMag, it is inaccurate to say that China has hashrate dominance because Bitcoin miners participating in <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/key-misunderstanding-china-purported-bitcoin-hashrate-dominance" rel="noopener noreferrer nofollow" target="null" text="null" title="null">China-based mining pools are geographically distributed</a>. This makes it incredibly difficult to say that any one country controls a majority of network hash power.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-mining-crackdown-epicenters-nft-phishing-scam-asia-express/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Bitcoin miners steamrolled after electricity thefts, exchange ‘closure’ scam: Asia Express</a>

Bitcoin decentralization is a matter of national security — Auradine CEO

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