GHash.IO and double-spending against BetCoin Dice

[mmitech]

Ok now we reached that point, there is a potential risk and something has to be done now, today I was checking again to just see this



https://blockchain.info/pools?timespan=24hrs

[coinrevo]

42%, up from 38% 4 days ago. Would be good to have a graph over time.

* what would be the implications of reaching 51%?

* what was the most recorded % of any pool? I thought BTC guild had 49% for quite a while.

* Why are people adding and not running away?

[Davyd05]

42%, up from 38% 4 days ago. Would be good to have a graph over time.

* what would be the implications of reaching 51%?

* what was the most recorded % of any pool? I thought BTC guild had 49% for quite a while.

* Why are people adding and not running away?

ignorance. and the possibility that its their own hashing power being added, terribly frightening. Hopefully mining companies can start to produce and deliver closer to dates and re assure people that they won't get bfl'd lol I'd have a miner if it didn't require such a leap of faith D:

[drawingthesun]

* what would be the implications of reaching 51%?

If this happens expect a little bit of panic and BTC price dropping. If I were GHash.IO I would be actively selling as much bitcoin as possible right about now. Unless they have honour and stop the pool from getting over 50%, but from the sounds of it they have no honour and would rather cause panic.

[AussieHash]

http://organofcorti.blogspot.com.au/2013/12/december-8th-2013-weekly-pool-and.html

1. BTCGuild and GHash.IO
GHash.IO overtook BTCGuild this week - they now have a quarter of a percent more of the network than BTCGuild.

Last week I wrote:
"GHash.IO keep increasing their share of the network, most likely due to CEX.IO trading. I'm not sure how I feel about this - it's an increase in the proportion controlled by a single entity, but in effect any pool has the same control of hashes. It should make no difference that (as far as I'm aware) CEX.IO maintains the hash sources locally rather than the sources being distributed. Is there a downside I'm not understanding?"
I received a couple of good responses on bitcointalk.org:

From eleuthria, BTCGuild pool op:
"Only extra worry from cex.io/ghash.io that is different from past concerns is accountability.  If a public pool *attempted* to do something nefarious that pool just committed suicide whether they succeed or fail at the gamble.  When a pool that has ~1 PH/s (based on estimates looking at their speed fluctuations during known pool issues for public vs private) privately owned, there is no accountability left.  Pair that with using a 0% fee for what was already the 2nd largest mining entity before the public was allowed in.  If they attempt something, there is basically no downside.  If the public hashrate leaves due to an attempt, they aren't actually losing anything (no fee) other than the mining time on their private farm."

From gmaxwell, bitcoin developer:
"The excuse giving for years of why consolidations of ten percent, twenty percent, or even more, in the hands of pool operators didn't effectively disprove the Bitcoin security model was that pool operators were more obligated than a typical miner to behave with the public interest at heart because the hashrate controlling miners could vote with their feet.

I've never been too fond of the argument: evidence (e.g. miners voting with their feet very slowly even when a pool is clearly robbing them) suggests otherwise... But that argument doesn't even exist for GHash.io/CEX.io: the miners are captive and cannot leave. Worse, there is a moral hazard because an unknown portion of the hardware is paid for by other people (at top dollar rates too) and so if some stunt they perform debases its value... so what? Heck, perhaps it drops the market value down to nothing an cex can buy their obligations back for a song. This means that CEX.io can probably profit from an attack even if that attack ultimately fails."

Thanks for explaining that, guys. I feel a little foolish for not having taken market forces into account.

[Peter R]

gmaxwell quote from above:  "for GHash.io/CEX.io: the miners are captive and cannot leave"

The cex.io price per GH/s is consistently too high to earn a bitcoin profit, yet people still pay it.  If someone were to create a similar service to cex.io but allow short-selling of GH/s, then I'm certain this would drive the price to its natural level.  Miners would then leave cex.io in favour of this new cloud-mining farm and CEX/Ghash would have less money to re-invest in new mining hardware.  

It's like they are able to grow because their customers are eager to lose money for the privilege of "cloud mining."

[edmundedgar]

* what would be the implications of reaching 51%?

Hard to say, but somebody had lost a lot of bitcoins to theft or fraud, and instead of being a purely distributed p2p network, Bitcoin was now controlled by one mining company that had the technical ability to censor and even reverse the transactions in question, that somebody might want to explore whether the mining company had any legal liability to refund what they had lost...

[mmitech]

this is how it looks now, the community have to do something about it

[AussieHash]

And Still growing, pool speed up from 4.16PH to 4.61PH over last 2 shifts (8 mins each).  Perhaps they'll reach 51% by the weekend
Edit : 4.7PH 4.81PH now...

[itod]

The cex.io price per GH/s is consistently too high to earn a bitcoin profit, yet people still pay it.

Do you really think that other people, who do the opposite of what you do, are just plain stupid? Have it ever occured to you maybe you don't know something they do? CEX.IO is a trading platform, not a mining pool. If you can't earn a profit there, it doesn't mean someone else can't.

[TH3xR34P3R]

Hopefully we can all sort this, I've put up my current mining share on there for sale since I'm not heavily invested in it, more of a get to know how it works deal. Anyone care to make a p2pool tutorial video for each version?

[Gabi]

Situation is getting too risky. I can't trust bitcoin when a single entity control almost half of hashing power. No one should trust it.

[whtchocla7e]

The possibility of this happening was known since the very beginning so why are you all freaking out now when it's too late? No central bank you say? The entity with the most computing power is the central bank. Will be interesting what happens now.

[goode400]

This will be affecting adoption rates massively. If I were thinking of buying in and I were doing my due diligence, this would certainly put me off.

[Xian01]

 Glad I bailed on ghash when I did, but this is scary to see their hash rate climb near 51%, and all we do is just sit back and watch it like a bad horror movie

 So this is how Bitcoin dies... (?)

[Balthazar]

The possibility of this happening was known since the very beginning so why are you all freaking out now when it's too late? No central bank you say? The entity with the most computing power is the central bank. Will be interesting what happens now.

That's much worse than any central bank. Central banks usually are public companies. Such structures are regulated by law and/or by government executives.

We have no law or public authority here, so this "central bank" is able to do whatever the owner wants. And nobody can stop, inspect or regulate such type of activity. It's absolute monarchy as is. The owner may be able to accept or decline any new protocol rules or updates, for example...

[Come-from-Beyond]

The possibility of this happening was known since the very beginning so why are you all freaking out now when it's too late? No central bank you say? The entity with the most computing power is the central bank. Will be interesting what happens now.

That's much worse than central bank. Central banks are a public companies... And those structures are regulated by law.

There is no law or public activity, so this "central bank" is able to do whatever the owner wants. And nobody can stop or regulate his activity. It's absolute monarchy as is.

+21'000'000

[_biO_]

Isn't this kind of centralized hashing power too dangerous, even way below 51%?

Doesn't it gradually change from a "you may be successfull at tempering with the blockchain" to a "you are guaranteed to be successfull" @ 51% (or really anything above 50%)?

[Come-from-Beyond]

Isn't this kind of centralized hashing power too dangerous, even way below 51%?

If u read about Selfish Mining u'll see that we already have a big problem.

[RangerK]

Isn't this kind of centralized hashing power too dangerous, even way below 51%?

If u read about Selfish Mining u'll see that we already have a big problem.

Maybe you can help me.  I don't get why selfish mining is a problem.  To me it seems like a miner is getting a head start on the next block at the risk of losing the current block.

If this is unethical (and I'm not sure it is), it is only unethical toward other miners.  It doesn't disturb the functionality of Bitcoin from a user's perspective.