Studies whether the proof-of-work protocol serves its intended purpose of supporting decentralized cryptocurrency mining. The authors develop a two-stage game-theoretical model, where miners first invest in hardware to improve the efficiency of their operations, and then compete for mining rewards in a rent-seeking game. They argue why advancements in hardware efficiency do not necessarily lead to larger miners increasing their advantage, and show that investment in new hardware contributes to decentralization by allowing smaller miners to expand and new miners to enter the competition. The study highlights the vulnerability of smaller and emerging cryptocurrencies, as well as of established cryptocurrencies transitioning to a fee-based mining reward scheme.