Should I be worried about the 51%?

[phillipsjk]

I guess I am going to be a dissenter and say: yes, you should be worried.

The one thing that separates Bitcoin from VISA, Paypal and the Banks is the distributed transaction ledger. Anybody can add to the transaction ledger so long as the expend sufficient resources: termed "proof-of-work". Having mining concentration so concentrated breaks the design assumptions of the protocol.

The first time this happened (with the  DeepBit pool) self-regulation worked. This time, the culture appears to have changed. Instead of pulling their hash-power, many hashers are asking for a protocol change to mitigate the problem instead. Various developers have mentioned such emergency coding in the past, lending credence to that argument. However, in my opinion, if that comes pass: The Bitcoin experiment will have been a failure.

How A Mining Monopoly Can Attack Bitcoin

I also plan to complete selling half my BItcoin by Friday.
I am selling half of my Bitcoin holdings because of Ghash

Two reasons:

• I need the money
• I don't believe for a minute that Ghash.io shut-down or redirected any hash-power; other than to solo mining.

[Willisius]

I guess I am going to be a dissenter and say: yes, you should be worried.

The one thing that separates Bitcoin from VISA, Paypal and the Banks is the distributed transaction ledger. Anybody can add to the transaction ledger so long as the expend sufficient resources: termed "proof-of-work". Having mining concentration so concentrated breaks the design assumptions of the protocol.

The first time this happened (with the  DeepBit pool) self-regulation worked. This time, the culture appears to have changed. Instead of pulling their hash-power, many hashers are asking for a protocol change to mitigate the problem instead. Various developers have mentioned such emergency coding in the past, lending credence to that argument. However, in my opinion, if that comes pass: The Bitcoin experiment will have been a failure.

How A Mining Monopoly Can Attack Bitcoin

I also plan to complete selling half my BItcoin by Friday.
I am selling half of my Bitcoin holdings because of Ghash

Two reasons:

• I need the money
• I don't believe for a minute that Ghash.io shut-down or redirected any hash-power; other than to solo mining.

I agree, sadly. Bitcoin runs on the assumption that at least half the network is acting "morally," so to speak. I'm afraid that this is no longer true.

[fryarminer]

How A Mining Monopoly Can Attack Bitcoin

Excellent article!!

[moriartybitcoin]

You should be very worried!

[fryarminer]

I wouldn't say you should be worried. In pain maybe, but not worried.
In my opinion the only danger it causes is the drop in btc price, and lack of adoption from the masses who think that btc has been compromised and has failed as a system. And the bad press only augments those two things.
Ghash wouldn't actually do an attack. Once they hit 51% they are going to be under the world microscope - the instant they try anything all the btc world will come down on them.

That being said, Ghash IS actively attacking bitcoin RIGHT NOW by allowing their hash rate to be that high. The attack they are doing is precisely the two things I mention above: devaluation and lack of confidence in the system.

[FattyMcButterpants]

we need to be vigilant. one should always worry about mining centralization (and 51% is not the only issue there). this is a real problem, and trusting the integrity of the blockchain to any one pool -- that has to end.