Bitcoin Security Endangered By Powerful Mining Pool

An anonymous reader writes Ars Technica reports that for the first time in Bitcoin's five-year history, a single entity has repeatedly provided more than half of the total computational power required to mine new digital coins, in some cases for sustained periods of time. It's an event that, if it persists, signals the end of crypto currency's decentralized structure."

Ghash.IO is not consistently over 51%, yet anyways

[mysidia]

Not yet anyways.

6 months ago GHash.IO promised [ghash.io] they would (1) Take steps to prevent accumulating 51% hashing power, including: not accepting new miners, and (2) They would not attempt an attack, and (3) They would provide cex.io users an option to use another mining pool (They have apparently not implemented (3) yet).

A DDoS [cryptocoinsnews.com] against the pool was reported to occur yesterday, which adversely affected mining. At one point... their hashrate was reported to have dropped to 7%. Then BitFury pulled 1 PH/s out of their pool.

Re: Isn't the block chain what makes it decentrali

[sandertje]

If you control 51% of the hashing power in the network, you can modify the block chain while simultaneously self-verifying your version as the one-and-true block chain.

Re:What happens if

[sFurbo]

The difficulty is updated every 2016 blocks, or roughly every two weeks [bitcoin.it]. If the amount resources spent on mining was suddenly reduced extensively, the mining would just go much slower until the next update, so no one would be able to take advantage of that (although it could be problematic for bitcoin, if e.g. the update went from 10 minutes to 100 minutes). After the next difficulty update, the difficulty would be low, but if the mining pools were back up, you would not be able to control bitcoin. Even if the update rate goes to 1 minute, this will only persist for 201,6 minutes, or a few hours.

All of this is assuming that no other response was done in the two weeks after the DDOS.

Re:What happens if

[N3x)(]

Well the thing is, getting 51% doesn't mean you can steal any coins. It means you get to control who can and cannot spend their coins. Also you would be able to do "double spends" of coins in certain situations. Getting 51% means you control the transfer service not the coins themselves. Also it would be really really expensive and once you stop the network will start working as normal again.

Re:Bitcoin stopped being distributed a long time a

[pantaril]

The original idea was millions of end users running Bitcoin mining as a background job on their CPU. That's totally dead.

The author of the original idea bets to disagree:

Long before the network gets anywhere near as large as that, it would be safe
for users to use Simplified Payment Verification (section 8) to check for
double spending, which only requires having the chain of block headers, or
about 12KB per day. Only people trying to create new coins would need to run
network nodes. At first, most users would run network nodes, but as the
network grows beyond a certain point, it would be left more and more to
specialists with server farms of specialized hardware. A server farm would
only need to have one node on the network and the rest of the LAN connects with
that one node.

That is from Satoshi Nakamoto's post from 2008: http://www.mail-archive.com/cr... [mail-archive.com]

Re:What happens if

[jdavidb]

There are a whole host of reasons why what you are saying is impossible. First off, no matter how much CPU power you accumulated, you wouldn't be able to rival the hashes per second being put out by the custom hardware. If you rooted and botnetted every CPU on earth you would still only be a fraction of the hashes per second of the Bitcoin network. CPUs for Bitcoin mining were obsoleted by GPUs long ago, and both CPUs and GPUs are now way-obsoleted by ASIC.

Also, even if you were able to control a majority of the hash power on the Bitcoin network, you would still not be able to spend somebody else's Bitcoin. To do that you would have to crack the private key for the account containing the Bitcoin. Doing that is a totally different math problem from what Bitcoin mining hardware is doing, and there are a lot of visuals out there illustrating that it would likely take longer than the projected life of the universe to crack these keys using currently available methods. If you had a majority of hashpower on the network, you could alter the blockchain, which is the ledger showing in what order transactions occurred. This would allow you to double-spend your own Bitcoin and cheat somebody, but would not allow you to spend somebody else's.