Bitcoin Protocol Vulnerability Could Lead To a Collapse

First time accepted submitter stanga writes "Cornell researchers unveiled an attack on the Bitcoin mining protocol that enables selfish mining pools to earn more than their fair share. In a technical report the authors explain this attack can be performed by a pool of any size. Rational miners will join this pool to increase their benefits, creating a snowball effect that may end up with a pool commanding a majority of the system's mining power. Such a pool would be able to single-handedly control the blockchain, violating the decentralized nature of the increasingly successful Bitcoin. The authors propose a patch to the protocol that would protect the system from selfish mining pools smaller than 25% of the system. They also show that Bitcoin can never be safe from selfish mining pools larger than 33% of the network, whereas it was previously believed that only groups larger than 50% of the network were a threat to the system. The question is — can the miners operating today adopt the suggested fix and dismantle too-large pools before a selfish mining pool arises?"

Comments

The Wild West

[mythosaz]

Bitcoins are the wild west...and that's why they're so exciting.

I missed the gold rush, but there's still money to be made selling shovels and pans to those who think they didn't...

The "middle manager" attack

[slew]

Start with an intense desire to building your own private empire that you control.
Hiding information from others to gain a competitive advantage.
Populating other groups with spys to see what progress they are making.
Eventually giving rational people no choice but to join your team or be crushed.

I propose to call this the middle manager attack.