Bitcoin War: The First Real Threat to Bitcoin?
For most Bitcoiners, it is a well known fact that there is a significant risk in the decentralized peer-to-peer currency pertaining to hashing power. In order to maintain a perfectly democratic internet currency, no one single entity should ever have control of 51%, or greater, of the total network hashing power.
Today, one of our researchers discovered that according to Blockchain.INFO, a miner at 85.214.124.168 currently has approximately 15% of the total hashing power. This, in itself, is every day news. However, the strange or even frightening fact is that it is producing empty blocks (single transaction blocks). If this 15% turned into 51%, it could have the potential to kill bitcoin. Why are they doing this? There are a few possible reasons:
1. The entity may have discovered a method for increasing mining ROI, and essentially, is earning its 50 bitcoins per block much more quickly than others. In general when finding a block, hashes for every transaction must be computed. When computing 1 transaction per block versus 100, you can imagine the latter would be more costly than the former. However, this means that the entity would not receive any fees for processing transactions. It is difficult, at the current time, to determine whether this would be beneficial.
2. The entity is willing to blow money on mining these empty blocks. Essentially, this could lead to a complete stop in bitcoin transaction processing. If the entity obtains 51% of hashing power and fully stops processing transactions while mining against only its own blocks, the block chain will become useless. Some people who might do this include governments, banks, competing currencies, or ridiculously wealthy and bored individuals who have a vendetta against bitcoin.
3. This could also be a botnet that does not wish to deal with the hassle of constantly sending all of the current transaction information to its zombies. This would be more for coding simplicity rather than for financial gain.
As of today, there is still very little risk. Additionally, assuming this entity falls under the #1 listed above (i.e., not entirely malicious), the worst thing that will happen is that bitcoin transaction confirmations will be slowed down by whatever percent of hashing power they are “contributing,” and Jerry McGuire will yell “SHOW ME THE MONEY!”
So what is it? Is this entity generously increasing their ROI, or is it attacking and taking over? With the recent security advisories and, of course, the widely publicized hacks, it looks like the WWW (Wild Wild West) is in full effect.
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69 Comments
Bitcoins are too much hassle anyway, I’ve had a bitcoin wallet for months and i still don’t have a single bitcoin in it.
If you are mining with your office PC solo or in a group you probably never will without just turning your hard cash into Bitcoins via an exchange. Just having a wallet doesn’t do squat.
You are one of the lucky ones. When it crashes to zero you will have the same amount as the tools the actually put up hard earned money to buy them. SCAM!
Will someone please just finally put a bullet in this ignorant troll’s stupid looking face ffs?
What is the date of the original post?
This article is just a lie, there is no such information in the block chain. You can’t trace miners to their IPs. This is all made up.
If a block is solo mined, you most certainly can trace where it came from. How do you think it was reported to the rest of the network? Granted, the miner could be using TOR to hide his or her true identity, but the block still comes onto the network from somewhere.
How about the dev’s limit the percentage amount of processing power allowed by a single IP address? or a single a mining rig?
Perhaps some sort of a requirement by an entity to identify itself in order to be allowed processing over a certain percentage of the overall processing power?
has nothing to do with the mining, everything to do with unregulated cryptocurrency.
mr. bitcoin could hold and distribute all the bitcoins, we wouldn’t have this feeding frenzy of valuation, but the system behind it would be no less sound.
The problem with bitcoin is the same as any other fiat currency system. It, like all other fiat currencies in the world, will fail, though possibly not as miserably as the dollar will.