The Bitcoin Mining Arms Race: GHash.io and the 51% Issue
Tensions over bitcoin's long-term security have eased following a hastily-arranged roundtable of mining participants on 9th July in London. With representatives from all areas of bitcoin mining and ASIC hardware manufacturing in attendance, the most significant thing about the meeting was that it even occurred at all. A forum for discussing these issues is critical to maintaining the integrity of the bitcoin network, as its overall health depends on smooth mining operations with a minimum amount of orphaned blocks, hard forks and dominant players capable of executing a 51% attack. Last....
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For the past two weeks, the Bitcoin community has been buzzing with worry over the mining pool GHash.io. Founded in July 2013, the pool has quickly risen to become the world's largest Bitcoin mining group, prompting concerns that they will use their control over the network for malicious purposes (most worrisome would be a so-called 51% attack). With these concerns in mind, I contacted CEX.io (a cryptocurrency exchange and GHash's sister company) to request a comment on this issue. They directed me to Jeffrey Smith, CIO of CEX and GHash, who was kind enough to answer some questions about....
CoinDesk's Daniel Cawrey recently visited and toured the facilities at Butterfly Labs, one of the most prominent and written about producers of bitcoin mining technology. In this second part of this series, he reports on the factors involved in the bitcoin mining arms race. Now that Butterfly Labs is shipping ASIC bitcoin miners at a steady pace, their production plus that of Avalon and mining pools like ASICMiner are causing the mining difficulty to go up quite quickly. What this means is that it takes more computational power to complete proof of work algorithms. It means that a race is....
Decentralization, n. The security assumption that a nineteen year old in Hangzhou and someone who is maybe in the UK and maybe not have not yet decided to collude with each other. There has been a large amount of ruckus in the past week about the issue of mining centralization in the Bitcoin network. We saw a single mining pool, GHash.io, amass over 45% hashpower for many hours, and at one point even grow to become 51% of the entire network. The entire front page of the Bitcoin reddit was ablaze in intense discussion and a rare clash of complacency and fear, miners quickly mobilized to....
Ghash.io is still currently the largest Bitcoin mining pool, based on data from the last 48 hours. In June, the media had a frenzy over the fact that a Bitcoin Mining pool had over 50% of the total network hashrate, thus presenting an unnecessary threat to the health of the Bitcoin network. Currently, they are sitting at around 30% of the total Bitcoin network hashrate and today it has been revealed that they plan to never go above 39.99% ever again. Unlike BTC Guild, Ghash.io does not have a set mitigation plan involving raised fees or closed registrations to back up their promise. In....
Bitcoin Mining Pools will meet to discuss a permanent solution to the threat of a 51% attack. In response to community concerns, Ghash.io has posted to Cex.io's blog regarding the threat of a 51% attack presented by Ghash.io's rapid growth, as promised by Jeffrey Smith. In their blogpost, Ghash.io restated their "intention to help protect and grow the broad acceptance of Bitcoin and categorically in no way harm or damage it." In the same breath, Ghash.io explained that they are firmly against temporary solutions such as the implementing of a pool fee. The still largest Bitcoin mining pool....