Pooling Pressure Risk

Pooling pressure is the set of economic incentives for hash rate aggregation, specifically:

• Proximity Premium
• Variance Discount
• Distortion
• Variation

There are several manifestations of of pooling. One is geographic, where independent miners become physically closer together. Another is cooperative, where formerly-independent miners join forces and co-locate grinding. Another is virtual, where miners become grinders and aggregate hash rate to a single remote miner. Another is the existence of relays, which aggregate miner hash power. Another is capital flow, since the higher hash rate associated with greater capital utilization is a form of co-location.

Given a perpetual positive pressure, transaction selection will eventually be reduced to one person's control. It is possible that this is already the case.