[2014-07-17] Bitcoin 'mining pool' promises to stay small

[erono]

http://www.businessweek.com/ap/2014-07-16/bitcoin-mining-pool-promises-to-stay-small

Mining pool GHash.IO, which is controlled by a British company, CEX.IO Ltd., said Tuesday that it would not amass more than 40 percent of the processing power of the bitcoin system. Earlier this summer, it briefly exceeded 50 percent.

Miners operate the computers that keep track of bitcoin transactions. As a reward, they receive newly minted coins. A miner that controls more than 50 percent of bitcoin processing could control the flow of transactions, freeze people out of the network and keep all future bitcoins for itself. However, that would undermine the usefulness and credibility of the system, potentially making bitcoins worthless.

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[ThomasCrowne]

Don't think I would go so far as to say 40% of overall network hashrate is 'small' :/

[CoinMode]

Don't think I would go so far as to say 40% of overall network hashrate is 'small' :/

Seriously, if 40% is the new standard for a "small" mining pool, then we all might as well sell every coin now and just stop using the network completely. If we are so delusional, then bitcoin is already doomed to failure. Luckily, the article doesn't reflect the community's stance on "small".

[freedomno1]

Promises to only go for the 50% success rate nice

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

[CoinMode]

Promises to only go for the 50% success rate nice

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

I saw a whitepaper about six months ago discussing the possibility of a 51% attack that could be done with only 33% of the network. Basically, it would not be very hard as long as you could manipulate the media surrounding your pool. It would only take a few tries to do it, so you'd only have to make a couple diversionary posts on facebook an twitter in order to cover your tracks enough to permanently damage the entire bitcoin network with your attack. It's a very disturbing concept, to say the least.

[freedomno1]

Promises to only go for the 50% success rate nice

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

I saw a whitepaper about six months ago discussing the possibility of a 51% attack that could be done with only 33% of the network. Basically, it would not be very hard as long as you could manipulate the media surrounding your pool. It would only take a few tries to do it, so you'd only have to make a couple diversionary posts on facebook an twitter in order to cover your tracks enough to permanently damage the entire bitcoin network with your attack. It's a very disturbing concept, to say the least.

It's been a while but I recall a chart in the forums somewhere that shows the likelihood of sucess based on the percentage of the network you have in control

But went a bit lazy and just borrowed the Bitcoin wiki one
https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

Oh whitepaper lol
https://bitcoin.org/bitcoin.pdf

The race between the honest chain and an attacker chain can be characterized as a Binomial Random Walk. The success event is the honest chain being extended by one block, increasing its lead by +1, and the failure event is the attacker's chain being extended by one block, reducing the
gap by -1.
The probability of an attacker catching up from a given deficit is analogous to a to a Gambler's Ruin problem. Suppose a gambler with unlimited credit starts at a deficit and plays potentially an infinite number of trials to try to reach breakeven.

p = probability an honest node finds the next block
q = probability the attacker finds the next block
qz = probability the attacker will ever catch up from z blocks behind

That good old stuff.

[turvarya]

Promises to only go for the 50% success rate nice

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

I saw a whitepaper about six months ago discussing the possibility of a 51% attack that could be done with only 33% of the network. Basically, it would not be very hard as long as you could manipulate the media surrounding your pool. It would only take a few tries to do it, so you'd only have to make a couple diversionary posts on facebook an twitter in order to cover your tracks enough to permanently damage the entire bitcoin network with your attack. It's a very disturbing concept, to say the least.

How does Facebook and Twitter influence the Blockchain?

[okthen]

Finally.
What took them so long to decide this?
It seems like they like to have people scared.

[CoinMode]

Promises to only go for the 50% success rate nice

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

I saw a whitepaper about six months ago discussing the possibility of a 51% attack that could be done with only 33% of the network. Basically, it would not be very hard as long as you could manipulate the media surrounding your pool. It would only take a few tries to do it, so you'd only have to make a couple diversionary posts on facebook an twitter in order to cover your tracks enough to permanently damage the entire bitcoin network with your attack. It's a very disturbing concept, to say the least.

How does Facebook and Twitter influence the Blockchain?

They don't. They influence the miners long enough for an attack to occur.

[LiteCoinGuy]

solutions maybe:

http://www.coindesk.com/bitcoin-mining-detente-ghash-io-51-issue/

[CoinMode]

solutions maybe:

http://www.coindesk.com/bitcoin-mining-detente-ghash-io-51-issue/

Keep in mind that Ghash's original stance, which they surely would love you to forget about, is that a 51% attack wouldn't occur because they said so. They actually asked us to just trust them. Ghash.io is no longer serving the best interest of bitcoin, and Ghash has completely abandoned the main idea that bitcoin is trustless. I can't wait until Ghash.io dies like they should.

[Cicero2.0]

solutions maybe:

http://www.coindesk.com/bitcoin-mining-detente-ghash-io-51-issue/

Keep in mind that Ghash's original stance, which they surely would love you to forget about, is that a 51% attack wouldn't occur because they said so. They actually asked us to just trust them. Ghash.io is no longer serving the best interest of bitcoin, and Ghash has completely abandoned the main idea that bitcoin is trustless. I can't wait until Ghash.io dies like they should.

Another big pool would take their place. Miners are attracted to big pools with good luck. Especially when they are trying to pay off equipment they charged to a credit card and racing against difficulty rises to make a profit.

[Yeeehaaa]

I really like GHash.IO and using it myself. But it would be nice if there was little bit more business competition. 

[Kprawn]

The miners should not be asked to leave. They should have done this on their own, when the 40% was breached.

But I still think the 51% is a non issue. {Andreas mentioned a lot of counter measures, to prevent a 51% attack} Until more mining pools, stay non-competitive to the bigger established one's, this will be a repeated occurrence.

Crowd funding to grow smaller mining pools, should be considered, as a vehicle to drive competition.