Saturday, June 14, 2014

Bitcoin Mining Finally Gamed?

Ittay Eyal and Emin Gün Sirer (via Kontra):

A Bitcoin mining pool, called GHash and operated by an anonymous entity called CEX.io, just reached 51% of total network mining power today. Bitcoin is no longer decentralized. GHash can control Bitcoin transactions.

[…]

GHash is in a position to exercise complete control over which transactions appear on the blockchain and which miners reap mining rewards. They could keep 100% of the mining profits to themselves if they so chose. Bitcoin is currently an expensive distributed database under the control of a single entity, albeit one whose maintenance requires constantly burning energy -- worst of all worlds.

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