Much has been written on the Post-Quantum Problem (PQP). We won’t rehash it all. We encourage readers to review these writings if they are unfamiliar with the capabilities of a Cryptographically Relevant Quantum Computer (CRQC) and what risks such a device poses to the Bitcoin network. In short, a CRQC can break the fundamental assumptions on which Bitcoin’s key-security is based: with knowledge of only a public key, the corresponding private/secret key can be recovered.

Localhost Research is quickly approaching the one-year anniversary of its office opening. In that time, we’ve found our footing as a group and begun developing a team culture and vision for our future. We’ve also published three transparency reports, closely detailing some of our most exciting work.

This is our third Transparency Report. These reports offer us an opportunity to detail some of the recent activity our organization has engaged in. We hope to surface interesting materials and inspire others to dig deeper into our focus areas and the work which surrounds it.

The Problem

Mining centralization remains a largely unmitigated tail risk to Bitcoin’s censorship resistance. This risk stems from multiple distinct vectors rather than a single root cause. One is pool centralization, driven by the economic incentive to eliminate payout variance. Another is supply chain concentration, where the manufacturing of mining hardware is effectively monopolized. There is also infrastructural asymmetry, where advantages in energy costs and network latency inherently favor large-scale, geographically specific operations. Because these pressures are structurally independent, no silver bullet exists. Addressing them requires a targeted suite of countermeasures.