Bitcoin Miners Treatment Dangers Threshold – Business Insider
Lots of people believe Bitcoin is impregnable.
Yesterday displayed it may not be.
GHash.io, the world’s largest collective of bitcoin miners, gained control of more than 42% of all of the laptop processing that powers the Bitcoin network. (Because of the expense now involved for a single miner to create bitcoin, lots of people now pool their computing power.) It’s the very first time they came close controlling more than 50% of the entire network. Were that 50% threshold everzwijn crossed, a host of problems have the potential to occur. Wij’ll get to what those are te a ogenblik.
Bitcoin miners exist to make a buck. But the price they pay to do so is to confirm other people’s transactions. This makes sure the same bitcoins, which of course don’t physically exist, aren’t spent twice.
When they perform such a confirmation, by unscrambling an encrypted string of letters and numbers, they’re rewarded with bitcoins. This is what the “Confirmations” button you see te your Bitcoin wallet after you’ve made a transaction refers to. Here is one of the larger ones:
Below the 50% threshold, there are enough independent miners who can separately confirm whether your transaction is legit.
But a collective that violates the 50% threshold would have the capability to confirm all Bitcoin transactions on their own &mdash, and thus the capacity to begin messing with the transactions’ reliability. For example, they could send out false confirmations, switch sides the direction of transactions, or block them from occurring entirely. And you wouldn’t even know it wasgoed happening.
Spil soon spil the Bitcoin community realized what wasgoed happening at GHash, “independent” miners who’d subscribed to the collective eliminated their computers from the pool. Plus GHash, despite its opaque management (its equipment is rumored to be sited te Ukraine, but no one knows much about its leadership), zometeen released a statement telling they would “take all necessary precautions to prevent reaching 51% of all hashing power, ter order to maintain stability of the Bitcoin network.” Quartz’ Chris Mims wasgoed the very first to report the story.
Indeed, getting to more than 50% without anyone noticing is fairly difficult. Blockchain.informatie, the principal webpagina tracking the Bitcoin network, keeps a running tally of which groups have what share of the system. GHash’s share has come back down to 40%. But it jibes with a chart wij recently published showcasing control of bitcoin wealth is strenuously concentrated. Here’s what the network control chart looks like now: GHash still loves the plurality of all hashing power:
Bitcoin observers agree that there wouldn’t be more than a makeshift disruption to the network once 50% wasgoed breached. Spil soon spil anyone realized this had occurred, most people would zekering using Bitcoin, sending prices crashing and making it unprofitable for the “hellion pool” to maintain majority control.
But there are even more extreme scripts. Laatstgeborene Gorlick, the COO of Cloud Hashing, a collective recently profiled ter The Fresh York Times, did not rule out the possibility that some unknown group could one day take control of the entire network with a giant leap ter processing power. “If someone wasgoed developing the technology behind the scenes, then launched it all at once, it would be bad,” he told us by phone recently.
That remains a remote possibility, he said, since the Bitcoin community remains puny enough that someone would eventually take notice.
This is not the very first time a mining collective has approached the 51% threshold. Last spring, the Reddit community went ballistic after a group called BTC Guild, which at the time managed many of the most powerful miners ter existence, called ASICs, almost succesnummer the figure.
BTC Guild holder Michael Marsee told us te a note today that the problem has not become any less acute since then. While many pools consist of a large majority of “independent miners” not directly affiliated with the pools’ founder, GHash wasgoed strongly weighted toward its own proprietary miners.
“It almost happened to BTC Guild ter the early days of ASIC mining, where almost all existing ASICs were on my pool because it wasgoed the only one that worked for them,” he said. “GHash.io’s problem is different te that half of their speed is wielded by themselves. It’s self-inflicted, and without that private speed they would not even be the largest pool, let alone near 51%.”
The Bitcoin community remains persuaded that anyone who participates ter Bitcoin automatically has its best interests at heart.
But this kleintje of power concentration would seem to strike at the heart of the Bitcoin mission.