Ghash.io has voluntary to suspend parts of service!

[rix5]

If someone in charge at ghashes.io reads this:
we see your pool becoming dangerous for the value of btc. If overstocks adoption didn't happen today your company would have caused a crash on the exchanges.

I am sure about this. I petition ghashes.io to suspend parts of their service for a short time for the greater good and for the networksecurity until other pools have managed to catch up with them.

Should they not do so: many will jump off btc as soon as ghash.io cross 45%
A full-on crash is sure to happen in case ghash.io gain 51% of the network.
This issue can cause btc to loose up to 95% of the current value. Just my own estimate.
I will surely sell ALL my btc if i see ghashes.io gain the 50% no matter what the other news are.

Just needed to be said. I would be grateful if someone from ghash.io would come on here and tell us at least that they recognize the issue as a problem and how they plan on handling it. Please do not underestimate this 51%-issue.

Thanks for everybody reading this and giving their opinion.

[Zakryze]

Hey man thanks for opening up this thread.
I am really concerned right now and probably not the only one after reading the thread about the doublespends and whatnots. We need to get more attention to this topic at all costs. Also please ensure to get official statements by cex to this. I will email the support right after posting this. Post it on the forums, mail it to them and show that we as a network do not accept centralization. The whole mining on other pools stuff just makes it impossible to trace the the hashing power of cex.io in total. It is necessary to gain transparency because that is the only way to ensure this currency and plattform that bitcoin is can succeed in the long run.

Labcoin 2.0 is upon us and maybe people didnt see the signs last time but this time we as a network have to do better. People with deep knowledge about the network itself and also the financial aspects of this have to come up with a solution and if cex doesnt react, we have to find a constructive way of getting the power back to the people. Even with the next gen miners this is almost impossible because people pay mad prices for the ghashes on cex right now and I don't see how we can put an end to this because of the moneydriven greed people that think that they miss out today if they dont buy while they dont see that they ruin themself in the near future if they blow away all their money right now to make cex take over the network tomorrow. Please wake up people. Realize how this network works and don't give away your precious coins to people centralizing what was meant to be free and decentralized.

[Raghnar]

https://ghash.io/ghashio_press_release.pdf

[Serge]

back in the day, when such things occurred, miners tried and did convince other miners to switch to other pools for greater good of bitcoin.

[Zakryze]

https://ghash.io/ghashio_press_release.pdf

Buying time is what they are doing. Nothing more. Until on the 4th of february every private miner gives up on them because they ask valid IDs and who wants to give up on his privacy and trust them with their IDs?

[rix5]

https://ghash.io/ghashio_press_release.pdf

this really is not enough. I don't want to have to trust them. That release really translates to "we will continue to expand up to 50%" if you read it right.

[siameze]

https://ghash.io/ghashio_press_release.pdf

Buying time is what they are doing. Nothing more. Until on the 4th of february every private miner gives up on them because they ask valid IDs and who wants to give up on his privacy and trust them with their IDs?

Remember who else had lax security and wanted all your personal info? 

[rix5]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I understand your point, but i wouldn't make this noise if i didn't watch btce trollbox and marketmovement very closely today. Yes, if they decrease now in power i will shut up. If they further expand this talk will not stop, but intensify and also take prices down. Of course. Don't speculate on the ignorance of others. Only small fries get burned here. Large holders are in most cases familiar with the inner workings of btc and they will dump on you when they see btc-network is centralized.
Maybe majority of holders is ignorant, but the largest stashes are not ignorant at all. They wouldn't be the largest stashes otherwise. When the top 10% holders dump this party is over. No matter what the average Joe knows or cares about. I don't want to be alamist. But it is better to have this talk now than later. I sincerely hope this is not an issue anymore in a few weeks. But as of today all of the talk about this issue has actually driven down prices. Ghash.io already affected the value of btc in a negative way. It happend today. This is to be taken serious. I hate it to sit on exchange all day with the triggerfinger ready to sell. I really don't want to trade like that.

Everybody was hoping and talking about 2k$ per btc. I really can't see it hit 2k$ anymore with this situation.

[rix5]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I understand your point, but i wouldn't make this noise if i didn't watch btce trollbox and marketmovement very closely today. Yes, if they decrease now in power i will shut up. If they further expand this talk will not stop, but intensify and also take prices down. Of course. Don't speculate on the ignorance of others. Only small fries get burned here. Large holders are in most cases familiar with the inner workings of btc and they will dump on you when they see btc-network is centralized.
Maybe majority of holders is ignorant, but the largest stashes are not ignorant at all. They wouldn't be the largest stashes otherwise. When the top 10% holders dump this party is over. No matter what the average Joe knows or cares about.

51% attack doesn't mean bitcoin is centralized, it has nothing to do with that. Remember a 51% if in the wrong hands can allow people to do a double spend attack, that doesn't mean they will do it.

Also most of the larger holders are not freaking out at all. Ghash has already made good about their policy to stop taking more miners and keeping the hash rate below the 51%. Also remember deepbit had this issue, and BTCGuild had this problem and a couple others, this is how the network spreads FUD.

Plus BTC-E isn't a real exchange holds no real volume.

51% in the wrong hands can render btc unusable. The risk alone is enough to depress prices long before those 51% are reached in my views. I want to see prices go up. I made this thread because i recognized a stronger than usual dip with all that talk about ghash.io. So for me there is no doubt this issue has already affected price of btc. People were about to panic when the overstock-news just prevented a crash. Well, just my subjective impressions of course.
We don't have to reach consensus on this matter. I just wanted to voice my concerns and petition ghash.io to take this matter more seriously and take a step back to secure their own source of income for the long time. They should admit to themselves they expanded much faster than the network in general and are now reaching an unhealthy level of expansion that is actually a real threat to this whole btc-experiment. They can not ask people to just trust them. That is not how it works.

[rix5]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I understand your point, but i wouldn't make this noise if i didn't watch btce trollbox and marketmovement very closely today. Yes, if they decrease now in power i will shut up. If they further expand this talk will not stop, but intensify and also take prices down. Of course. Don't speculate on the ignorance of others. Only small fries get burned here. Large holders are in most cases familiar with the inner workings of btc and they will dump on you when they see btc-network is centralized.
Maybe majority of holders is ignorant, but the largest stashes are not ignorant at all. They wouldn't be the largest stashes otherwise. When the top 10% holders dump this party is over. No matter what the average Joe knows or cares about.

51% attack doesn't mean bitcoin is centralized, it has nothing to do with that. Remember a 51% if in the wrong hands can allow people to do a double spend attack, that doesn't mean they will do it.

Also most of the larger holders are not freaking out at all. Ghash has already made good about their policy to stop taking more miners and keeping the hash rate below the 51%. Also remember deepbit had this issue, and BTCGuild had this problem and a couple others, this is how the network spreads FUD.

Plus BTC-E isn't a real exchange holds no real volume.

51% in the wrong hands can render btc unusable. The risk alone is enough to depress prices long before those 51% are reached in my views. I want to see prices go up. I made this thread because i recognized a stronger than usual dip with all that talk about ghash.io. So for me there is no doubt this issue has already affected price of btc. People were about to panic when the overstock-news just prevented a crash. Well, just my subjective impressions of course.

Exactly in the wrong hands, look at this way, if Ghash did pull off a 51% attack, they be hitting two parts of their income very had. I doubt they would want to do this. They rather probably get the bitcoin so saying they are wrong hands is untrue. This didn't do anything to the price, this is normal ups and downs. If it was down to ~$700 I would say it affected it but it isn't. It wouldn't render bitcoin unusable we could just switch the hashing if need be, and hard fork. People weren't panic at all, I been watching this since it broke if it was a panic sell it would have happened and we be down ~$700 which it isn't showing that people aren't scared by this and shouldn't. It is FUD.

i think if the news of overstock-implementation didn't come out today we could already be at the 700-range.

Are the identities of the owners of ghash.io known? I suspect they operate as anoynmous as everybody else in this environment. (I could be wrong since i didn't do an in-depth research about them) Anonymous players are not trustworthy at all. Why should they be? It could be just about anybody operating those pools.

[rix5]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I understand your point, but i wouldn't make this noise if i didn't watch btce trollbox and marketmovement very closely today. Yes, if they decrease now in power i will shut up. If they further expand this talk will not stop, but intensify and also take prices down. Of course. Don't speculate on the ignorance of others. Only small fries get burned here. Large holders are in most cases familiar with the inner workings of btc and they will dump on you when they see btc-network is centralized.
Maybe majority of holders is ignorant, but the largest stashes are not ignorant at all. They wouldn't be the largest stashes otherwise. When the top 10% holders dump this party is over. No matter what the average Joe knows or cares about.

51% attack doesn't mean bitcoin is centralized, it has nothing to do with that. Remember a 51% if in the wrong hands can allow people to do a double spend attack, that doesn't mean they will do it.

Also most of the larger holders are not freaking out at all. Ghash has already made good about their policy to stop taking more miners and keeping the hash rate below the 51%. Also remember deepbit had this issue, and BTCGuild had this problem and a couple others, this is how the network spreads FUD.

Plus BTC-E isn't a real exchange holds no real volume.

51% in the wrong hands can render btc unusable. The risk alone is enough to depress prices long before those 51% are reached in my views. I want to see prices go up. I made this thread because i recognized a stronger than usual dip with all that talk about ghash.io. So for me there is no doubt this issue has already affected price of btc. People were about to panic when the overstock-news just prevented a crash. Well, just my subjective impressions of course.

Exactly in the wrong hands, look at this way, if Ghash did pull off a 51% attack, they be hitting two parts of their income very had. I doubt they would want to do this. They rather probably get the bitcoin so saying they are wrong hands is untrue. This didn't do anything to the price, this is normal ups and downs. If it was down to ~$700 I would say it affected it but it isn't. It wouldn't render bitcoin unusable we could just switch the hashing if need be, and hard fork. People weren't panic at all, I been watching this since it broke if it was a panic sell it would have happened and we be down ~$700 which it isn't showing that people aren't scared by this and shouldn't. It is FUD.

i think if the news of overstock-implementation didn't come out today we could already be at the 700-range.

Are the identities of the owners of ghash.io known? I suspect they operate as anoynmous as everybody else in this environment. (I could be wrong since i didn't do an in-depth research about them) Anonymous players are not trustworthy at all. Why should they be? It could be just about anybody operating those pools.

Anonymous people want to make money too, I am just saying they run two business that make a lot of money why would they want to end it over a 51% attack.

as was said in another thread before: btc has enough enemies. The pool could be operarted by a large bank or a government. We don't know. There are entities out there that would not care about a relativeley small financial loss just to stop this whole thing.
We can not tell for sure if ghash.io is malicious to btc or not since we apparently don't know who is opperating it.

[Cryptolator]

Anonymous people want to make money too, I am just saying they run two business that make a lot of money why would they want to end it over a 51% attack.

I do think the same way, it's not in their interest to reach 51%.

[Cryptolator]

as was said in another thread before: btc has enough enemies. The pool could be operarted by a large bank or a government. We don't know. There are entities out there that would not care about a relativeley small financial loss just to stop this whole thing.
We can not tell for sure if ghash.io is malicious to btc or not.

Didn't saw it this way, that's a bit scary ! 

[rix5]

if ghash.io is private persons or companies that are in for the profit there is not much to worry, i agree. But we don't know that.

edit:
i just checked the stats again and they lost another 2% and are now at 38%. Let's hope this thread becomes obsolete soon.

[Borbolon]

This is about 10 hours old (long before this thread was started):
http://qz.com/165300/no-bitcoin-isnt-about-to-be-taken-over-by-a-massive-cartel/

After Ghash.io’s large stake came to light on bitcoin discussion boards, members of the pool started flocking away, reducing the pool’s share of mining to 38% over the course of just seven hours. This is just more and stronger proof that the system is self-correcting—such mining pool exoduses have happened in the past.

It seems correct according to blockchain: https://blockchain.info/pools

[bitpop]

Fuck them and Fuck anyone who ever used them

[BittBurger]

Why aren't pools just banned?

Or limits put on pools?

Or another solution provided?

Why is everyone flailing their arms like this is some monster who could grow out of control?

We are humans.  There's a bitcoin dev deam.  Why doesn't someone just fix the problem?

Weird...

[maursader]

Plot twist: They ARE the bitcoin dev team.

[BitEnthusiast]

Maybe bitcoin itself shouldn't be regulated just the mining pools.

[gmaxwell]

Why aren't pools just banned?
Or limits put on pools?

Pooling can't be limited or banned because there is no admissions control on mining. Everyone can mine without asking permission, and if it were otherwise it would be a point of centralization.

Or another solution provided?

There is, P2Pool, which is a fully decentralized mining pool based on the same technology as Bitcoin. Unfortunately a lot of miners operated under an incorrect understanding of mining where they believe their income is proportional to the size of the pool that they are on based under a misunderstanding of mining as a race instead of as a poisson process and so they try to mine at the biggest pool. As a result we've seen a continual churn where a large pool gets a lucky run and appears larger than it is on some charts and then people flock over and it bloats up, then people freak out.

The fact of the matter is that "51%" is hardly more concerning than 40%. If a party controlling 40% hashpower tries, they'll successfully reverse 6 confirms 50% of the time. That someone could control so much hashpower by compromising a single party or system is thoroughly outside of our security model, even if it isn't quite "51%".

In any case P2Pool suffers for four reasons: (0) It's moderately small, so none of the people who misunderstand mining as a race will use it. (1) It's poorly misunderstood and frequently hit with FUD: people saying it has poor income (actually no, its all time income is 107% of expectation) or high orphans (actually, in the last several months it has had something like 0.1% orphans, an order of magnitude below other pools) (2) it takes more effort to setup, you have to run a Bitcoin node with it, (3) it takes more resources to run—  there are people with tens of thousands of dollars of mining gear running it off a crappy flaky raspberry pi— it makes no sense, but thats how it is P2pool needs a reasonably competent (e.g. strong laptop or a desktop machine) hosting the miners to really work well.

Related to (3) is that P2Pool has no snazzy marketing or slick webpage. There are other pools with pool-fee income over half a million dollars per month that can afford some snazzy UI work, but P2Pool is a volunteer open source work funded by donations when its funded at all.

There are _other_ ways to to do more decentralized mining.  The GBT protocol offered by Eligius and a few other pools was intended as a start for making the classical centralized pooling models more decentralized but it has not been widely adopted. If it were you could have things like miners generating their own work and only using a centralized (and potentially distributed) pool to coordinate sharing payouts... but there is basically no active work on that right now.

[bitpop]

P2pool barely works on some asics otherwise it's my #1 choice. #2 is bitparking. #3 is slush.

Stupid newbies put us in this predicament.

[gmaxwell]

P2pool barely works on some asics otherwise it's my #1 choice.

Please be specific or it's just spreading FUD:

I can personally attest P2Pool works great on Avalon, it also works great on Bitmain Antminer (w/ firmware update, the original firmware is buggy).

I know from others that it works fine on BFL and it works on Asicminer blades so long as the +1 option is added to the username.

[bitpop]

P2pool barely works on some asics otherwise it's my #1 choice.

Please be specific or it's just spreading FUD:

I can personally attest P2Pool works great on Avalon, it also works great on Bitmain Antminer (w/ firmware update, the original firmware is buggy).

I know from others that it works fine on BFL and it works on Asicminer blades so long as the +1 option is added to the username.

Didn't work on my Jupiter. And sure as hell didn't work on Avalon for a long time. Not fud, try it, I hope it works on more. And I really hope it works on Neptune. But 50% of asics isn't exactly working, yet.

I love p2pool and used it for a very long time. I even had a public node for a very long time. It's not fud, I'm more mad I couldn't use it with my Jupiter. I almost even all ran it at half ghs just to support p2pool. That's not fud. Fud is if I said oh I had to use ghash.

Fuck no, I never touched stupid cexio. I even use the smallest pool possible, bitparking. And it's amazing. I still even run my p2pool node in peer mode to help the network (at least I think it does).

Tldr: New asics better support p2pool, not the other way around. And use the smallest pools possible. Those big payouts are exciting like solo mining.

[coinrevo]

gmaxwell, thanks for the posts on these matters.

That someone could control so much hashpower by compromising a single party or system is thoroughly outside of our security model, even if it isn't quite "51%".

It seems to me there is not really a process to deal with this or an understanding what this entails. Even if there were 3 pools with "only" 33% hashpower each, how should I know they are three separate entities? Also, isn't this also about how the rules (source) can be changed? The process is entirely opaque, so even if 100 people who are experts trust some mechanism doesn't mean 1 million people who don't understand it should. For example for me trust depends on statements of core developers to some degree. I don't trust statements of mining pools, nor should anybody else.

I believe that there several flaws in proof of work and the way the consensus works and it is now showing more clearly. There is no way to enforce certain mining policies. One would need some basic protocol which ensures proof of work is forced to be distributed. In the end it would be much better to have a broad based consensus of what the rules of the network are, and a protocol how rules can be changed. After all it has to be acknowledged that some properties are set in stone. It is my understanding that economic majority and the way the code is secured and distributed is showing its limits. Cycles are always transferable no matter what you do. And there is  no channel for how users of the network can make decisions what rules they want to follow.

[TookDk]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I understand your point, but i wouldn't make this noise if i didn't watch btce trollbox and marketmovement very closely today. Yes, if they decrease now in power i will shut up. If they further expand this talk will not stop, but intensify and also take prices down. Of course. Don't speculate on the ignorance of others. Only small fries get burned here. Large holders are in most cases familiar with the inner workings of btc and they will dump on you when they see btc-network is centralized.
Maybe majority of holders is ignorant, but the largest stashes are not ignorant at all. They wouldn't be the largest stashes otherwise. When the top 10% holders dump this party is over. No matter what the average Joe knows or cares about.

51% attack doesn't mean bitcoin is centralized, it has nothing to do with that. Remember a 51% if in the wrong hands can allow people to do a double spend attack, that doesn't mean they will do it.

Also most of the larger holders are not freaking out at all. Ghash has already made good about their policy to stop taking more miners and keeping the hash rate below the 51%. Also remember deepbit had this issue, and BTCGuild had this problem and a couple others, this is how the network spreads FUD.

Plus BTC-E isn't a real exchange holds no real volume.

51% in the wrong hands can render btc unusable. The risk alone is enough to depress prices long before those 51% are reached in my views. I want to see prices go up. I made this thread because i recognized a stronger than usual dip with all that talk about ghash.io. So for me there is no doubt this issue has already affected price of btc. People were about to panic when the overstock-news just prevented a crash. Well, just my subjective impressions of course.
We don't have to reach consensus on this matter. I just wanted to voice my concerns and petition ghash.io to take this matter more seriously and take a step back to secure their own source of income for the long time. They should admit to themselves they expanded much faster than the network in general and are now reaching an unhealthy level of expansion that is actually a real threat to this whole btc-experiment. They can not ask people to just trust them. That is not how it works.

You can still perform double spend attack with less than 51% control of the network. With e.g. 45% is there a good change to be successful with a double spend. However with 51% will you statistically be sure to be successful over time.

[F-bernanke]

This Ghash thing is scary as hell.

I see them as enemy's of BTC. They have to raise fee's to get rid of the newbie miners.

Yes, they make a little money with mining, but this is peanuts compared to the money they can make to short BTC and use scare tactics. Or some government/banks can offer them a few billion to destroy BTC.


Right now I put my faith in big BTC holders to set up miningpower to compete with those motherfuckers and keep their stash safe.

[TookDk]

This Ghash thing is scary as hell.

I see them as enemy's of BTC. They have to raise fee's to get rid of the newbie miners.

Yes, they make a little money with mining, but this is peanuts compared to the money they can make to short BTC and use scare tactics. Or some government/banks can offer them a few billion to destroy BTC.


Right now I put my faith in big BTC holders to set up miningpower to compete with those motherfuckers and keep their stash safe.

+1

I totally agree.

I remember when I used BTC guild with my FPGA farm in april-may 2013, when BTC Guild got "too big", they reacted with increasing the fee, that caused miners to move to other pool, and they reduced they hashrate, very responsible of them.

Personally I have moved some of my funds into altcoin, because of the "Ghash.IO risk", I might be paranoid but I find LTC more safe than BTC right now.

[F-bernanke]

We will implement a feature, allowing CEX.IO users to mine bitcoins from
other pools. So when they purchase GH/s they can put it towards any pool
they choose.

This does not solve the problem, it only hides it, which is even worse. 

[whtchocla7e]

Why aren't pools just banned?

Or limits put on pools?

Why? That's regulation which is kinda against the whole idea of Bitcoin...

[Dr Bloggood]

There is, P2Pool, which is a fully decentralized mining pool based on the same technology as Bitcoin. Unfortunately a lot of miners operated under an incorrect understanding of mining where they believe their income is proportional to the size of the pool that they are on based under a misunderstanding of mining as a race instead of as a poisson process and so they try to mine at the biggest pool. As a result we've seen a continual churn where a large pool gets a lucky run and appears larger than it is on some charts and then people flock over and it bloats up, then people freak out.

So nobody even gains anything if they stay in Ghash?

That should make it easy for people to switch to another pool.

[boinc]

Mice cried, were pricked, but all continued to guzzle cactus bitcoin 

[justusranvier]

Unfortunately a lot of miners operated under an incorrect understanding of mining where they believe their income is proportional to the size of the pool that they are on based under a misunderstanding of mining as a race instead of as a poisson process and so they try to mine at the biggest pool.

Seems like smart pool operators could take advantage of this incorrect understanding by raising their fees as their fraction of the hashing power increases.

That would dampen the positive feedback effect of the dumb miners flocking to the largest pool just because it's the largest.

Actually that's what they should have been doing all along. Price signals really do work better than rationing - when a pool is attracting more hashing power than it wants rather than block new connections it should just raise prices.

[Rampion]

Unfortunately a lot of miners operated under an incorrect understanding of mining where they believe their income is proportional to the size of the pool that they are on based under a misunderstanding of mining as a race instead of as a poisson process and so they try to mine at the biggest pool.

Seems like smart pool operators could take advantage of this incorrect understanding by raising their fees as their fraction of the hashing power increases.

That would dampen the positive feedback effect of the dumb miners flocking to the largest pool just because it's the largest.

Actually that's what they should have been doing all along. Price signals really do work better than rationing - when a pool is attracting more hashing power than it wants rather than block new connections it should just raise prices.

That's what BTCGuild has historically done when they have reached dangerous quotas. They have taken up the fees.

[Notanon]

We will implement a feature, allowing CEX.IO users to mine bitcoins from
other pools. So when they purchase GH/s they can put it towards any pool
they choose.

This does not solve the problem, it only hides it, which is even worse. 

Right, so an option to reduce the pool hashrate to directing the hardware at another pool at the hardware owners discretion doesn't solve the problem? That's an interesting train of thought.

Personally, I'm surprised some of the other major pools didn't think of doing what CEX.io did earlier in terms of hosting hardware and allowing some to purchase shares in them. I mean, FFS, you'd think some of them would've noticed this earlier and gone "Hey, that seems like a good idea!" and implemented similar features in order to get more people involved with their own pools and help to limit the risk of a single pool having 51% or greater hashing of the entire network.

I seriously question the lack of foresight and initiative amongst the Bitcoin collective at times, I really do.

[justusranvier]

Personally, I'm surprised some of the other major pools didn't think of doing what CEX.io did earlier in terms of hosting hardware and allowing some to purchase shares in them. I mean, FFS, you'd think some of them would've noticed this earlier and gone "Hey, that seems like a good idea!" and implemented similar features in order to get more people involved with their own pools and help to limit the risk of a single pool having 51% or greater hashing of the entire network.

I seriously question the lack of foresight and initiative amongst the Bitcoin collective at times, I really do.

Within the next couple months CEX.io will have at least two competitors that I'm aware of, and that's just in Austin.

[F-bernanke]

Right, so an option to reduce the pool hashrate to directing the hardware at another pool at the hardware owners discretion doesn't solve the problem? That's an interesting train of thought.

Thats right, it only hides it.

They can switch it back any time they like.

[Frost000]

Within the next couple months CEX.io will have at least two competitors that I'm aware of, and that's just in Austin.

I would seriously welcome this and join both sites just not to have all of my eggs in the same proverbial basket.

Cex.io being the only viable option when it comes to trading GH/s (which in turn makes them the most appealing to "mine" if you have no hardware) is quite scary.

[drewster]

https://ghash.io/ghashio_press_release.pdf

Their press release says they won't implement a fee, but honestly, they should.  They could keep it very small -- maybe 0.25% or something like that.  It would deter relatively few people but probably enough, and would also them money.

[Klestin]

We don't have to know them, we don't have to trust them. They don't have to be 'good people'. The beauty of the Bitcoin system is NOT in the impossibility of a double-spend or other attack. The beauty is in the fact that it is ALWAYS financially better for hashing power to play by the rules.

Yes, a powerful pool could cause problems:

1) They could slow or interrupt transactions.  The result would be an immediate (and likely permanent) migration of miners away from their pool. There is no financial benefit to this.  In fact, if their actions erode Bitcoin confidence, they have succeeded in devaluing their owned hardware.

2) They could execute a double-spend.  If they're doing this with the goal of acquiring fiat, they're opening themselves to litigation.  The additional results of this would be a (likely temporary) loss of confidence in Bitcoin, and once again a (this time certainly permanent) migration of owners away from their pool.  That would have to be one HELL of a large double-spend to be worth it.  Unfortunately, the larger the double-spend, the more likely they will be to find motivated and financed litigation coming after them.

Note also that either of these problems automatically self-correct with the migration of users away from their pool.  Only one of those double-spends would exist on the permanent transaction chain.  The injured party sues, and the pool has gained nothing from this, and lost their user-base.

I'm all for keeping pools under 50%, but not to prevent these sorts of attacks.  All the same attacks that are possible at 51% are also possible at 40% or even less.  The ONLY difference is that they would take more time to execute, and would self-correct without user migration.  

The reason I would like to see pools comfortably stay under 50% is entirely psychological.  Due to the FUD about the "magic" 51%, an overly large pool gives Bitcoin detractors something concrete to point at, and that could slow adoption.

[emeraldforce]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

I agree cease and desist with the FUD already.

[justusranvier]

If pools growing too large causes the exchange rate to crash that's a good thing.

Fear of their investment rapidly losing value is one of the economic incentives for pools to behave well.

[HeliKopterBen]

This may be a dumb question since I am not a miner but who is required to execute a 51% attack in a pool?  Does it require all participants of the pool to reverse transactions, ect. or can anyone or a small group within the pool or only the pool operators execute the attack? 

[TookDk]

This may be a dumb question since I am not a miner but who is required to execute a 51% attack in a pool?  Does it require all participants of the pool to reverse transactions, ect. or can anyone or a small group within the pool or only the pool operators execute the attack?  

The miners do not "know" what they are mining. The pool just send them jobs and the miners return the result (shares) and get pay (there are many different payment schemes), but most easy to understand is Pay-per-share, you get a fix amount of santoshi for each submitted share. The pool owner can use the hashing power they are in control of to any anything they like and most miners wouldn't even notice that they are not mining the honest block chain as long as they are being pay for the jobs.

btw. it do not require 51% of the hashing power to execute a "51% attack" - its a matter of statistic. e.g. 40% hashing power can also perform double spend, the success rate are just less. GHash.IO has definitely the hashing power needed to perform double spend attacks, the would loos mining time, but as long as you "cheat" yourself to more BTC than you have to pay the miners, then can it be a profitable business. A scheme for a double attack is to send a bet to Santoshi Dice, if the bet win, fine, take the money, if the bet loose, use the hashing power to confirm the transaction to have gone elsewhere.

[FandangledGizmo]

If pools growing too large causes the exchange rate to crash that's a good thing.

Fear of their investment rapidly losing value is one of the economic incentives for pools to behave well.

Never in my entire life, in any movie, book or forum, have I ever seen or heard, & I doubt whether it would be possible to find, even if I scoured the depths of the universe, a statement that is as unbelievably f*cking stupid as the one above.  

To anyone who contributes resources or works for a mining pool that controls more than 10% of the network you are as evil as the most oppressive government agencies & central banks in the world combined and your stupidity is only eclipsed by the person that wrote the above statement.

[TrollboxChamp]

If pools growing too large causes the exchange rate to crash that's a good thing.

Fear of their investment rapidly losing value is one of the economic incentives for pools to behave well.

Never in my entire life, in any movie, book or forum, have I ever seen or heard, & I doubt whether it would be possible to find, even if I scoured the depths of the universe, a statement that is as unbelievably f*cking stupid as the one above.  

To anyone who contributes resources or works for a mining pool that controls more than 10% of the network you are as evil as the most oppressive government agencies & central banks in the world combined and your stupidity is only eclipsed by the person that wrote the above statement.

I have to agree. The only good thing is an evenly distributed network. I approve of you looking for light in darkness but youre trying to turn shit into caviar.

[FandangledGizmo]

I just want to apologise to justusranvier, read some of his posts and he's clearly a much smarter guy than me.

This situation just got me worked up & I over-reacted.  

[justusranvier]

Maybe that wasn't as clear as it could have been.

If pools could grow indefinitely without consequence, then some of them, sooner or later, are going to try to monopolize the hashing power.

That is a bad thing.

If we assume pools operators and the miners who supply their hashing power are it to make money, then one very powerful disincentive for them to grow excessively is if their size causes adverse effects on the exchange rate.

That doesn't save you from an attacker with infinite dollars to spend who doesn't care about generating a positive ROI, but it does protect the network for lesser threats.

So when headlines appear about a pool getting too large cause a large selloff in the markets followed by rapid action by that pool to correct the situation it tells me the system is working.

[BigJohn]

For my money, this story isn't getting nearly enough attention.

Everyone is all up in arms about Ghash. But that's only part of the story. The fact is that for quite a while now over 50% of the hashing power is controlled by very few people. Bitcoin's hashing is quite centralized, and this is a huge issue for me. Bitcoin is supposed to be decentralized in essence. Yet one of the primary functions is effectively centralized.

I don't see what difference does it make that Ghash is ramping down, or that people are moving away from Ghash. They're just moving their power from one pool to another. The end result is exactly the same. The hashing power is controlled by the same few individuals.

[HeatherG78]

What I think is there should be no ASICs too.

Also, no one pool should have more than 10%

Even 20% is way too high for one pool

[TookDk]

What I think is there should be no ASICs too.

Well, there is an alternative: LTC.

[Pangia]

What I think is there should be no ASICs too.

Well, there is an alternative: LTC.

LTC is an alternative until that company (Alpha -- 'something') comes out with an ASIC for LTC.  Hopefully, they were just talking nonsense and can't do it until a few years.

[justusranvier]

But this didn't cause a crash...

It was enough of a selloff to prompt a rapid press release:

http://bitcoincharts.com/charts/mtgoxUSD#rg1zczsg2014-01-09zeg2014-01-09ztgSzm1g10zm2g25zvzcv

https://twitter.com/cex_io/status/421334549726244864

[gweedo]

But this didn't cause a crash...

It was enough of a selloff to prompt a rapid press release:

http://bitcoincharts.com/charts/mtgoxUSD#rg1zczsg2014-01-09zeg2014-01-09ztgSzm1g10zm2g25zvzcv

https://twitter.com/cex_io/status/421334549726244864

First off that is far from a crash. $50 down when the price is ~$940 is small. Now how can you tell that the volume is from panic sellers or overstock selling off their bitcoins? That is what caused the downturn and spike in volume.

[pissing]

A full-on crash is sure to happen in case ghash.io gain 51% of the network.
This issue can cause btc to loose up to 95% of the current value. Just my own estimate.
I will surely sell ALL my btc if i see ghashes.io gain the 50% no matter what the other news are.

You're an idiot.

Do you just follow people around the forum posting things like "you are an idiot" or "you are ignorant" to increase your post count and get money from the dice sponsor? I just clicked your last post, if it was my sponsorship program I would suspend your pay. Just because in the terms and conditions it says you cannot get away with saying "great post" and "thanks" doesnt make it acceptable to just go round posting "idiot" "ignorant" and "stupid".

Just a thought

[FandangledGizmo]

Maybe that wasn't as clear as it could have been.

If pools could grow indefinitely without consequence, then some of them, sooner or later, are going to try to monopolize the hashing power.

That is a bad thing.

If we assume pools operators and the miners who supply their hashing power are it to make money, then one very powerful disincentive for them to grow excessively is if their size causes adverse effects on the exchange rate.

That doesn't save you from an attacker with infinite dollars to spend who doesn't care about generating a positive ROI, but it does protect the network for lesser threats.

So when headlines appear about a pool getting too large cause a large selloff in the markets followed by rapid action by that pool to correct the situation it tells me the system is working.

Yes I realised that's what you meant the first time. But there is VAST, HUGE amounts of money to be made from having the power Ghash.io  currently has to crush the price, even if they only have the power to utilize it ONCE.

Do central banks like Bitcoin? How much would they be willing to pay to crush it's reputation and price just before the bank bail-ins are announced and set it back 1 year +?

A small group of people having this power is the antithesis of why Bitcoin was created.

[justusranvier]

Yes I realised that's what you meant the first time. But there is VAST, HUGE amounts of money to be made from having the power Ghash.io  currently has to crush the price, even if they only have the power to utilize it ONCE.

Do central banks like Bitcoin? How much would they be willing to pay to crush it's reputation and price just before the bank bail-ins are announced and set it back 1 year +?

How exactly do you propose that would play out?

[garcias]

Maybe that wasn't as clear as it could have been.

If pools could grow indefinitely without consequence, then some of them, sooner or later, are going to try to monopolize the hashing power.

That is a bad thing.

If we assume pools operators and the miners who supply their hashing power are it to make money, then one very powerful disincentive for them to grow excessively is if their size causes adverse effects on the exchange rate.

That doesn't save you from an attacker with infinite dollars to spend who doesn't care about generating a positive ROI, but it does protect the network for lesser threats.

So when headlines appear about a pool getting too large cause a large selloff in the markets followed by rapid action by that pool to correct the situation it tells me the system is working.

Yes I realised that's what you meant the first time. But there is VAST, HUGE amounts of money to be made from having the power Ghash.io  currently has to crush the price, even if they only have the power to utilize it ONCE.

Do central banks like Bitcoin? How much would they be willing to pay to crush it's reputation and price just before the bank bail-ins are announced and set it back 1 year +?

A small group of people having this power is the antithesis of why Bitcoin was created.

True

[FandangledGizmo]

Yes I realised that's what you meant the first time. But there is VAST, HUGE amounts of money to be made from having the power Ghash.io  currently has to crush the price, even if they only have the power to utilize it ONCE.

Do central banks like Bitcoin? How much would they be willing to pay to crush it's reputation and price just before the bank bail-ins are announced and set it back 1 year +?

How exactly do you propose that would play out?

Well I can think of a few scenarios, but here's one -

_______________________________________________________________________________ ________

Scenario 1:British Intelligence already owns Ghash.io

Ghash.io was reportedly sold to unknown British based interests a while back,  since then it has expanded aggressively.

The British Intelligence Services are among the best and arguably most secretive in the world. Their cyber-warfare department is also one of the most 'offensive-capable' in the world.

Besides serving the interests of their central bank, London is also the no.1 financial centre in the world.

To assume that they don't understand the potential risk crypto-currencies pose and to assume that they wouldn't seek to mitigate and control those risks is naive. That IS their job.

For the short and medium term at least, Bitcoin isn't excactly the Enigma machine either. Even 4 years in, Ghash.io has made it look laughably easy to gain control of a double-spend 'doomsday switch' which can be used to decimate the price and trust in Bitcoin at a critical moment. This power they may now wield over Bitcoin is priceless. Best of all it can be blamed on hackers/rogue employee/greedy pool owners, whichever serves their purpose best.

Counter: But 55% of their hashing power is external, as soon as any double spending occurs, those external hashers will rapidly switch over to other pools.

Response: Those are the numbers THEY gave you. I would also suggest that if you can see 45%, what don't you see?

___________________________________________________________________________

That's just one of many scenarios. Believe it or not as negative as I've tried to make it, I'm actually British and proud to be and I'm also not selling my BTC. But I think even if it suppresses the price in the short term it's worth keeping this problem front and centre and working to address it now, (by strengthening p2pool etc.)

[TookDk]

Yes I realised that's what you meant the first time. But there is VAST, HUGE amounts of money to be made from having the power Ghash.io  currently has to crush the price, even if they only have the power to utilize it ONCE.

Do central banks like Bitcoin? How much would they be willing to pay to crush it's reputation and price just before the bank bail-ins are announced and set it back 1 year +?

How exactly do you propose that would play out?

Well I can think of a few scenarios, but here's one -

_______________________________________________________________________________ ________

Scenario 1:British Intelligence already owns Ghash.io

Ghash.io was reportedly sold to unknown British based interests a while back,  since then it has expanded aggressively.

The British Intelligence Services are among the best and arguably most secretive in the world. Their cyber-warfare department is also one of the most 'offensive-capable' in the world.

Besides serving the interests of their central bank, London is also the no.1 financial centre in the world.

To assume that they don't understand the potential risk crypto-currencies pose and to assume that they wouldn't seek to mitigate and control those risks is naive. That IS their job.

For the short and medium term at least, Bitcoin isn't excactly the Enigma machine either. Even 4 years in, Ghash.io has made it look laughably easy to gain control of a double-spend 'doomsday switch' which can be used to decimate the price and trust in Bitcoin at a critical moment. This power they may now wield over Bitcoin is priceless. Best of all it can be blamed on hackers/rogue employee/greedy pool owners, whichever serves their purpose best.

Counter: But 55% of their hashing power is external, as soon as any double spending occurs, those external hashers will rapidly switch over to other pools.

Response: Those are the numbers THEY gave you. I would also suggest that if you can see 45%, what don't you see?

___________________________________________________________________________

That's just one of many scenarios. Believe it or not as negative as I've tried to make it, I'm actually British and proud to be and I'm also not selling my BTC. But I think even if it suppresses the price in the short term it's worth keeping this problem front and centre and working to address it now, (by strengthening p2pool etc.)

I luv conspiracy theories  
This is one of the better I have seen; unlikely but definite plausible (don't get me wrong, I think your post are great, and very relevant to the topic).

[keithers]

The whole ghash.io mining percentage is worrisome in my opinion.   I could totally see the US Gov't trying to mimic this if possible, to try gain some control that we definitely do not want them to have.

[mjc]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

If one mining pool gets 51% it would crash the markets.  The users who didn't have an idea what mining was, would learn real quick.  The press would pick up on it.

The problem here is that their pool fee is 0%.  The guild faced this in the past year and they did the right thing.  They increased their pool fee to drive people away.

Ghash.io will need to do the same shortly. 

[F-bernanke]

You are making something that isn't that big of deal into a big deal. Now you think that they had the power to crash the markets? Half the users of bitcoins don't even know what mining is, so I don't think they would crash markets. Stop with this FUD.

If one mining pool gets 51% it would crash the markets.  The users who didn't have an idea what mining was, would learn real quick.  The press would pick up on it.

The problem here is that their pool fee is 0%.  The guild faced this in the past year and they did the right thing.  They increased their pool fee to drive people away.

Ghash.io will need to do the same shortly. 

+1

The fact that they didn't proves that they don't want to loose mining power.

Also the whole press release reads like advertising looking to get more miners to join the bandwagen, not comforting at all.

[hyphymikey]

https://ghash.io/ghashio_press_release.pdf

Buying time is what they are doing. Nothing more. Until on the 4th of february every private miner gives up on them because they ask valid IDs and who wants to give up on his privacy and trust them with their IDs?

I read the TOS and nothing was mentioned about ghash.io, only cex.io. I also saw nothing about mining, or valid IDs. Do you have a link to your info?