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.

Localhost Research depends on the generosity of its donors. Just last year, Mark Casey and Wences Casares helped bootstrap Localhost Research into existence. With our organization established and actively contributing to the ecosystem, we have begun the process of expanding our team and program offerings with the support of the broader Bitcoin community–individuals, corporations, and foundations who all see the value in our work.

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

On May 20th, 2025, Localhost Research was officially recognized as a 501(c)(3) non-profit by the United States Internal Revenue Service. This marks a significant milestone for our organization that we are excited to share with our community.