What Has Happened?
There have been a couple of scares with the infamous 51% attacks during Bitcoin mining and these may well be on the rise which is somewhat concerning for the biggest of the Cryptocurrencies.
The latest close call came from when the BTC.com, AntPool and ConnectBTC mining pools collectively mined a hash rate of 42% (25.7% from BTC.com, 16.1% from AntPool and 0.2% from ConnectBTC). This figure was for a 7 day period and saw the three mining pools mine 42% of all new blocks which is an impressive amount for the Chinese company – Bitmain – who owns these pools. However, it is has raised worries in the Cryptocurrency industry over the 51% attacks which are extremely detrimental to Bitcoin.
The 51% Problem
As we know, the Bitcoin mining process involves new blocks being developed by very powerful computers constantly – which is a massive power drain. Every single miner that is mining Bitcoin at any given minute has to effectively play against other miners in order to produce a block. Each and every miner therefore has to compete to produce their block by using hash combinations. It is only then when a correct sequence is found that a block is mined and produced and then joined onto a chain. This all sounds simple enough but things do get complicated when miners have discovered different blocks but at the very same time which leads to more than one chain. In this case, the system will identify the chain that has the longest history and then add the block to that one. Again, fair and pretty straight forward. The catch comes however when – as has happened recently on a couple of occasions – a miner owns 51% of the network power. In this instance, the miner can actually choose an older block if they want to and then mine from that time frame. This process in itself can actually override the original chain and wipe out all of the previous transactions effectively invalidating them. Even more scarily, the miner with 51% of the power can also decide not to accept any blocks that are not mined by themselves. This obviously is a massive problem for Bitcoin and its stability.
Another Attack Soon?
The few 51% attacks that have occurred have actually seen the best in miners, with GHash.io actually reducing its power level from 51% to 39% in order to avoid any worries. However, as is already noted above, Bitmain does already hold a lot of power in Bitcoin mining and a 51% attack could occur at any given time. With the 42% from the three pools already mentioned above alone as well as the prospect that Bitmain may actually have influence over other pools – official or not – there is every possibility that it could take control any at given point. This then bears the question of whether Bitcoin mining is now a more centralised operation. Which clearly – with the figures highlighted above – it is. This, as with all things Cryptocurrency, is a very temporary phase. Things change quickly and often in this digital economy and the miners working for Bitmain at the moment could quite easily opt for a different pool tomorrow. So although there are concerns, it is not something to get up in arms about just yet.