A single entity often controls more than half of all Bitcoin miningBy Shawn Knight 9 comments
Bitcoin has reached yet another milestone. Unfortunately, it's one that could pose a major security risk. Researchers from Cornell University have discovered that for the first time in the cryptocurrency's five-year history, a single entity has - on multiple occasions - been responsible for more than half of the total computational power required to mine new coins.
That entity is GHash, a mining pool that (correctly, it would seem) claims to be the "#1 Crytpo & Bitcoin Mining Pool." Despite the fact that GHash is comprised of multiple individuals, it's still a single entity controlled by whoever is in charge of the GHash pool.
Why the big deal, you ask?
As noted in a report from Ars Technica, a 51 percenter has tremendous power over the market. For example, they could spend the same coins twice, reject mining transactions from competing pools or even extort higher fees from those with large holdings. Taking it a step further, GHash could launch a DDoS attack against the entire Bitcoin network.
The good news is that GHash has only maintained majority control of mining for up to 12 hours at a time.
All of this comes just months after GHash promised not to cross the 51 percent threshold, a move they said would undermine their investment.
Interestingly enough, Cryptocoin News points out that the mining pool recently went offline and suggests that it may have been the victim of a DDoS attack in response to the 51 percent news. As of writing, however, their site appears to be completely functional.