Mining Nakamoto Coefficient
Minimum number of pools whose combined hash power exceeds 50% - the lower the number, the more vulnerable the network to a majority coalition.
What is it?
The Nakamoto coefficient measures the minimum number of mining pools whose cumulative hash power shares exceed 50% - that is, the smallest number of actors that would need to collude to control the network majority and theoretically censor transactions or reorganise the chain. It is computed daily from the block shares of the main pools: shares are sorted in descending order and counted until they cross 50%. The lower the coefficient, the more fragile the network against a majority coalition.
How to read
A coefficient of 1 or 2 indicates extreme fragility: one or two pools would suffice to form a majority. A coefficient of 3 to 4 remains concerning. From 5 upward, the network is more resilient since more independent actors must cooperate. The value should be read mostly as a trend: a downward drift over several quarters reflects a consolidation of the mining market.
Key zones
Coefficient ≤ 2: critical zone (a majority coalition is within reach of two actors). 3 to 4: fragile zone. ≥ 5: healthier zone. These thresholds are indicative, borrowed from the decentralisation analysis of distributed networks.
What to observe
Watch for sustained dips below 3: they coincide with phases of strong concentration where a few pools dominate. Compare with the Herfindahl index (HHI) and the pool concentration Gini to confirm a trend via several independent indices. A rebound of the coefficient reflects a redistribution of hash power toward more actors.
Historical context
In 2014, the GHash.io pool briefly neared 50% of hash power, triggering a community reaction and a voluntary miner migration. After the 2021 China mining ban, the market reconcentrated around a small number of large North American and Asian pools, structurally lowering the coefficient.
Expert notes
This coefficient is computed over the main identifiable pools. As the unattributed share (minor or unknown pools) is not broken down into individual actors, the coefficient is an upper bound on robustness: real fragility may be higher. Moreover, a pool aggregates many independent miners - the coefficient measures concentration between pools, not between miners. Decentralized template protocols (DATUM, Stratum V2) aim precisely to mitigate this risk by returning transaction choice to miners.
Common mistakes to avoid
A low coefficient does not mean an attack is imminent: coordinating several pools to censor the network would carry major economic and reputational cost, and miners can leave a pool within minutes. Conversely, a high coefficient does not guarantee perfect decentralisation if several pools share the same economic operator or the same template provider.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/mining-nakamoto-coefficient/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "mining-nakamoto-coefficient",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.