Looking Back at 5 Years of Proof of Work
Proof of Work has upheld the Ethereum ecosystem since its launch in 2015. Since then, a number of on- and off-chain events—including security events, network upgrades, and market forces—have influenced how miners and mining pools have interacted with the network.
Historically, mining data has been notoriously difficult to gather and unreliable to analyze. Codefi Data and ConsenSys Research worked together to analyze the available on-chain data to answer how the PoW consensus mechanism has evolved over the years and how miners have responded to critical events.
Through this report we aimed to answer the following questions:
- How has Proof of Work performed over the years since Ethereum’s launch in 2015?
- How have major planned and unplanned ecosystem events affected core elements of Proof of Work, including hashrate, miner count, payouts, and block production?
- How have the roles of miners and mining pools evolved over the years?
- How have Proof of Work mining block rewards been distributed, and how have they affected the balance of wealth in the Ethereum ecosystem?
We arrived at a set of conclusions about the Ethereum PoW mining ecosystem:
- Mining pools are more heavily impacted by on-chain events than by off-chain events. Payout addresses (miners) are more heavily impacted by off-chain events than by on-chain events.
- The overwhelming majority (>90%) of all blocks produced on Ethereum for the past two years have been mined by 56 known mining pools.
- The overwhelming majority (>90%) of all block rewards won on Ethereum for the past two years have been attributed to 56 known mining pools.
- The overwhelming majority (>80%) of Ethereum’s hashrate for the past two years has been attributed to 56 known mining pools.
- The second half of 2017 coincided with considerable consolidation of network activity among mining pools.
- Twice in Ethereum’s history, two mining pools have owned more than 51% of the network’s hashrate.