<P> Bitcoin was designed not to need a central authority and the bitcoin network is considered to be decentralized . However, researchers have pointed out a visible "trend towards centralization" by the means of miners joining large mining pools to minimise the variance of their income . According to researchers, other parts of the ecosystem are also "controlled by a small set of entities", notably online wallets and simplified payment verification (SPV) clients . </P> <P> Because transactions on the network are confirmed by miners, decentralization of the network requires that no single miner or mining pool obtains 51% of the hashing power, which would allow them to double - spend coins, prevent certain transactions from being verified and prevent other miners from earning income . As of 2013 just six mining pools controlled 75% of overall bitcoin hashing power . </P> <P> In 2014 mining pool Ghash.io obtained 51% hashing power which raised significant controversies about the safety of the network . The pool has voluntarily capped their hashing power at 39.99% and requested other pools to act responsibly for the benefit of the whole network . </P> <P> Bitcoin is pseudonymous, meaning that funds are not tied to real - world entities but rather bitcoin addresses . Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public . In addition, transactions can be linked to individuals and companies through "idioms of use" (e.g., transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses . Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information . </P>

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