Bitcoin’s decentralised nature is under threat after one UK mining pool was able to provide over half of the crypto-currency’s total output for periods of over 12 hours.
Researchers from Cornell University reported that a contributor known as GHash, which bills itself as the “#1 Crypto & Bitcoin Mining Pool”, contributed over 51 per cent of Bitcoin’s total cryptographic hashtag output for long periods and therefore threaten its decentralisation.
GHash is one of those dubbed as a “51 percenter” and this position of power opens up various privileges such as the ability to spend the same coins twice, reject competing miners transactions, or charge high fees for people with large holdings. Even more worrying than this is the fact that a malicious player with the majority holding could bring a denial of service attack against the entire Bitcoin network.
"A 51 percenter can control which Bitcoin transactions happen," wrote Ittay Eyal, a post-doctorate researcher in Cornell's Department of Computer Science, in an e-mail to Ars Technica. “One of Bitcoin's goals was to be a free system, independent of anyone's control. With small pools, no one has this kind of control. With a 51 percenter, there is."
It managed to reach the 51 per cent mark on a number of occasions and the most worrying part about this is that at one point it held onto the considerable chunk for over half a day.
GHash, which is operated by CES.io, is not understood to have used these advantages in a malicious way and there is no evidence to suggest this but its operators once promised to never cross the 51 per cent threshold before eventually doing so. Though Eyal and his fellow researcher Emin Gün Sirer did add that there is “absolutely no reason to trust GHash or any other miner” as “people in positions of power are known to abuse it”.
“A group with a history or double-expenditures just blithely went past the 51 percent psychological barrier: this is not good for Bitcoin,” the two researchers explained in a blog post.
The same researchers already claimed back in November 2013 that “selfish” Bitcoin miners could bring down the crypto-currency and this has all the hallmarks of their warning that a group controlling over 50 per cent sets a dangerous precedent.