Many are awkward with Ghash.io’s large percentage of total network hashrate
Update: Ghash.io has responded spil expected. Two Cornell researchers that have bot attempting to poke fuckholes te Bitcoin’s network security, Ittay Eyal and Emin Gün Sirer, have taken this chance to remind the Bitcoin community of many other theoretical attacks that can occur with a centralized Bitcoin mining network. Te fact, many of the theoretical attacks described would arguably be more likely than a blatant 51% attack. However, any attack, no matter how subtle, could be detected on the blockchain and the Bitcoin community will react te their best interests.
Ghash.io is a Bitcoin mining pool that has bot around for overheen a year. Ter the last year, Ghash.io has steadily grown a too-loyal backing of miners taking advantage of their large size and 0% toverfee structure. Ghash.io works alongside Cex.io, one of the very first cloudhashing services to be adopted by the masses. Customers can buy Bitcoin mining contracts from Cex.io and receive mined bitcoins without having to worry about the hardware or software involved. Renting hardware te the form of contracts is an increasingly popular choice among “miners” who wish to reap all the benefits of mining without violating a sweat. Miners use pools to slick out their expected income: Mining with a large pool permits you to have relatively onveranderlijk come back te each difficulty period. Ghash.io has previously spoken on this matter at the beginning of the year when ter the precies same situation:
“GHash.IO does not have any intentions to execute a 51% attack, spil it will do serious harm to the Bitcoin community, of which wij are part of. On the contrary, our plans are to expand the bitcoin community spil well spil utilise the hashing power to develop a greater bitcoin economic structure. If something happened to Bitcoin spil a entire it could risk our investments ter physical hardware, harm those who love Bitcoin and wij see no benefit from having 51% stake te mining.”
[dropcap size=petite]C[/dropcap]CN reached out to Ghash/Cex days ago and has just received a response from Jeffrey Smith, Cex.io’s Chief Information Officer, to a brief vraaggesprek:
CCN: What percentage of ghash.io’s hashing power is from cex.io? What percentage from other miners?
Jeffrey Smith: The hashing power of CEX.IO constitutes 25 procent of GHash.IO total hash rate. The surplus are independent miners.
CCN: Also… how is the functionality for permitting cex users to point their hashing power elsewhere?
Jeffrey Smith: It is very hard to implement this functionality, since on CEX.IO wij permit users to trade even puny portions of GHS (e.g. 0.001 GHS), and thesis puny amounts cannot be separately connected to other mining pools.
CCN: What has ghash.io learned from the last time this happened?
Jeffrey Smith: Wij understand that the Bitcoin community strongly reacts to GHash.IO’s percentage of the total hash rate. However, wij would never do anything to harm the Bitcoin economy, wij believe ter it. Wij have invested all our effort, time and money into the development of the Bitcoin economy. Wij agree that mining should be decentralised, but you cannot blame GHash.IO for being the #1 mining pool.
CCN: What steps were waterput ter place to ensure something like this didn’t toebijten again? (zekering accepting miners when you guys are at 50%?)
CCN: Which failsafes have bot tripped ter the last few days, what has ghash.io done te the last few days?
Jeffrey Smith: Wij strongly believe that Bitcoin mining should be decentralised. Wij have bot working hard for the past several months to ensure decentralisation of Bitcoin mining. Soon wij will present a valid solution to this kwestie.
CCN: What is ghash.io’s comfy level for total percentage of network hashrate? It seems there might be some disconnect inbetween your company’s vision and the community’s tolerance level.
Jeffrey Smith: The bitcoin community determines the comfy level of the GHash.IO’s percentage. Wij aim to please our users and provide quality trading and mining environment, while maintaining stability and prosperity of the Bitcoin community.
This Is Not The Very first Time This Has Happened
Ter January, Ghash.io broached the 40% mark and the Bitcoin community responded te fantastic style, showcasing the power of the mobilized Bitcoin community. Before that, ter April of 2013, BTC Guild also ended up with a large portion of the network hashrate. Te the aftermath of Ghash.io’s January fiasco, Ghash.io waterput out a press release to expose their own Mitigation Project. Half a year ago, Ghash.io promised to permit Cex.io customers point their hashing power towards other pools to mitigate the blatant centralization of mining power under one pool: Ghash/Cex has yet to fulfill this basic promise. Given that 25% of Ghash.io’s hashing power (upwards of 10% of the total network hashrate) is from Cex.io, this functionality wasgoed Ghash.io’s reaction to the risk of a theoretical 51% attack the last time this question came about. Technically, hardware rented from Cex.io, but pointed away from Ghash.io, would still ultimately be under the control of Ghash.io, however, it wouldn’t vertoning up spil such te our network pool charts.
BTC Guild’s technicus, Eleuthria, espoused BTC Guild’s Mitigation Project on the Bitcoin Forum, Reddit, and IRC. For the last year, BTC Guild has stayed true to its promise and BTC Guild’s pool speed has not risen overheen 50% of the total network hashrate. Eleuthria promised to raise fees by 50% to discourage fresh miners from joining the pool should BTC Guild’s percentage of network hashrate rise above 40%. Should it rise above 45%, BTC Guild would fully close off fresh registrations until the percentage of network hashrate dropped below 40%. BTC Guild released a zindelijk mitigation project that has worked to keep BTC Guild’s percentage of network hashrate at a manageable level for overheen a year. Ter stark tegenstelling, Ghash.io’s mitigation project has not had its desired effect because Ghash.io is unapologetic and has switched nothing despite repeated promises. Ghash.io has previously promised to never raise fees above 0%, which closes the voort on that effortless fix.
Thanks to CCN’s Scott Fargo for getting thesis quotes:
When asked about the dangers of mining pool centralization, BTC Guild technicus Eleuthria had this to say:
I can say that the fear of pool centralization is pretty misplaced thesis days. The amount of privately managed hash rate is massive, fatter than it has everzwijn bot. With the exception of a private miner that also runs a pool (like GHash.io), there is indeed no chance of any pool everzwijn becoming 40%+ again.
Ter tegenstelling, Nasty Mining’s OgNasty had this to say:
I don’t think typical Bitcoin miners realize the potentially disastrous consequences they are inviting by mining on large pools. There are too many possible screenplays to list that could result te one of the larger pools executing a successful attack on the network. By participating te centralized pool mining, Bitcoin miners themselves are unknowingly the greatest threat to the Bitcoin project. P2pool is a plain and effective decentralized mining solution to this combat this problem… any large portion of the network te the mitts of a few is a risk. You can make the script that if the #Two goes down for maintenance and the #Trio pool gets DOS’d by attackers, the #1 pool could then be able to perform a 51% attack while previously having much lower than 51% of the network. Many other screenplays exist spil well, and while unlikely, it would be unwise to disregard the possibility.
Zekering Worrying About The Theoretical 51% Attack
Coinotron, a Litecoin mining pool, had overheen 51% of the Litecoin network hashrate by most metrics a few weeks ago: No 51% attack everzwijn occurred. A large part of the general populace’s fixation with the theoretical 51% attack is its apparent feasibility. To those unversed ter the economic incentive structure of Bitcoin mining, a single Bitcoin mining pool nearing 51% of the total network hashrate looks exactly like a centralized point of failure that could then successfully launch a dual spend attack. People fear a successful dual spend attack because it would signal loss of faith te the Bitcoin network spil a entire. Te reality, none of thesis points are anywhere near spil true spil mainstream media makes them out to be. With so called “selfish mining,” an attack attempt could occur with even less than 51% of the total network hashrate under centralized control. However, Bitcoin experts, Andreas Antonopoulos ter particular, have bot acting spil a voice of reason to quell the sometimes misinformed fear.
I do not worry about a 51% attack on bitcoin. It is neither likely, strafgevangenis effective and it entirely contravenes the incentives of miners.
Coinsider This movie of Andreas Antonopoulos explaining the lack of a threat from 51% of the network hashrate being under the control of a single pool technicus to the Los Angeles Bitcoin Meetup.
Worry About Centralization Instead.
The community should realize that Ghash.io would never kill its golden goose by attempting a dual spend. Even if Ghash.io were taken overheen or nationalized by an irrational and malicious actor, the Bitcoin community can and will still react to preserve the network. The 51% attack has become somewhat of a Bitcoin Boogeyman. Ter reality, the 51% attack is not the worst thing that could toebijten with centralization of mining power: Centralization is the worst thing te and of itself. However the pool technicus has every incentive to play by the rules, letting one Bitcoin mining pool have too much of the total network hashrate is implicitly permitting for unnecessary risk. Spil such, CCN recommends that readers use a P2pool, like Ognasty and nonnakip of NastyMining and NastyFans have set up.
Ittay Eyal and Emin Gün Sirer have taken this chance to remind the Bitcoin community of all the other theoretical attacks that can occur with a centralised Bitcoin mining network.