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Largest Bitcoin Mining Pool Pledges Not To Execute '51% Attack'
An anonymous reader writes "Bitcoin transactions are confirmed by performing complex calculations, also known as 'mining.' If a single mining pool gains 51% of the overall computational power in the network, various forms of transaction manipulation become possible. Only a few years into Bitcoin's existence, this existential threat appears to be at hand, with Bitcoin mining pool ghash.io approaching 51% of mining power. ghash.io has now assured the Bitcoin community in a press release (PDF): 'GHash.IO does not have any intentions to execute a 51% attack, as it will do serious damage to the Bitcoin community, of which we are a part.' But can a network relying on such assurances survive in the long run?"
Add more compute power to a different pool.
Also, you could just as easily read this the opposite way: "Nice cryptocurrency you have there. It would be a real shame if we got to the point where we could completely control its value in other currencies and reap huge profits while doing so. Not that we'd ever dream of doing that - we promise that we're not even really considering the possibility."
I am officially gone from
The US government makes no such promise, and investors know it. Slow, long-term inflation is part of the instability prevention plans of most currency issuing nations.
So many Bitcoin stories. This one asks questions like,
"Can we trust them?!?"
"Are these assurances enough!?!"
Same answer to both: "Who cares anymore?!?"
Theoretically at least, the US Government has to answer to its citizens and there are a couple hundred million of us. Further, even though the US is a "super power", there are still serious consequences for mucking with the dollar too much.
Who does GHash.IO answer to?
That's utterly backwards.
The US dollar works because the Federal Reserve promises to manipulate it.
You do not have a moral or legal right to do absolutely anything you want.
In order to use any of the current breed of crypto-coins, I think you have to trust quite a few "random people on the Internet" anyway?
For starters, you have to put some trust in whoever developed the coin you're using -- because let's face it. The entire thing is just a piece of software that someone wrote. Did the developer pre-mine a bunch of coins that he/she is hoarding up secretly, waiting for everyone else to "establish" the coin as a viable currency, only to dump all of it in the future and crash the market -- walking away with the loot? Is there some sort of "back door" designed into a particular crypto-coin so the developer has a way to "cheat" and obtain coins more quickly than everyone else, bypassing the usual rules for mining one?
You have to put a lot of trust in the people running the currency exchanges. These places typically want you to transfer (sometimes relatively large) sums of crypto into wallets maintained on their servers, just so you can conduct a trade with that money. THEN, you have to further trust that they'll properly handle any withdrawal requests you make.
To a lesser extent, anyone in ANY mining pool has to put trust in the pool operator. While sure, most competent pools provide all sorts of statistics so you can see how your returns are being calculated and what they estimate your "hash rate" is? It's not out of the realm of possibility that one of these places could "skim off the top" by shorting you just a tiny little bit of hash rate that you wouldn't even notice. Multiplied by all of the miners using the pool, though, it amounts to a lot of CPU time the owner could be redirecting towards coins mined into his own personal wallet someplace?
If you want to talk about trusting government instead? Now you're talking about a very small group of elite, powerful individuals who call all the shots for a given currency. There's no "moving mining to another pool" if you don't trust the first one here.
So yeah, it really is a "choose your poison" situation -- but IMO, my own government has proven itself shady, not at all trustworthy, and relatively inept at accomplishing stated goals in a timely manner and under budget. By contrast, the people running the mining pools and exchanges I've used are still more of an "unknown" - but ones who so far, appear to have treated me fairly. So I know which one I'd rather place trust in right now.
The problem here is that mining these days requires custom ASICs made to compute the double SHA-256 used by Bitcoin as the proof of work, CPUs and GPUs just don't cut it. ghash.io is the pool attached to the larger manufacturer of them, and as its always more profitable to mine using your ASICs than sell them, you can't just buy a bunch for anywhere near the cost price and mine yourself.
Solving this will require someone to make and sell the mining hardware at near the cost price instead of using it themselves. They may lose a bit of profit but in the long run the network will be better off.
Come as you are, do what you must, be who you will.
I don't have strong feelings about Bitcoin either way, but as I understand it some folks support Bitcoin because it isn't controlled by a central bank or government.
Except it seems that one large mining pool -- or a consortium of smaller ones seeming independent but in truth acting together -- can game the system in certain ways. In short, controlling it. And given that large sums of money are on the line already, is Bitcoin really that different from any other currency?
Koans and fables for the software engineer
I wish people who didn't understand basic economics wouldn't post like they did.
Deflation makes an item worth $1000, worth $990 later. It hurts people with assets. However, if you have cash, that same amount of cash will buy more as deflation continues. Deflation is bad because SMART people stop buying things that will be cheaper tomorrow and inventory in shops is a bad thing because you pay interest on holding it while it reduces in value.
Inflation does not allow a country to deficit spend forever. Inflation allows paying off debt at a future time cheaper only if you ignore the interest on the debt. Usually interest on debt is higher than inflation, so that doesn't work.
What you were attempting to say is a fiat currency can never go bankrupt. If they country cannot pay debt they can print money until they can pay debt, that is the cause of hyper-inflation.
Please stop posting explanations of things that you don't understand.
I am not afraid of the Monopoly, as much as I am over reaching governments. Monopolies will eventually fail, over reaching governments just keep over reaching.
Yet somehow the East India companies managed to impoverish the larger part of humanity for over three centuries and have a run of over a century each. Monopoly and government are the same thing. Only American Libertarians think they live in a world where economic and political power have nothing in common and can't reenforce each other until the fundamentals of the economy turn against them.
You've got 3 schools of criticism there. In order of frequency,
A. Vaguely conspiratorial accusations centering around the fed and/or federal government(but never states, oddly) that are completely unhelpful. Typical quote: "Quantitative easing is stealing money"
B. Austrian school whining about Chicago school being the de facto source of understanding. Typical quote: "But our assumptions say all regulation is bad."
C. Actual scholars and sane economists highly detailed concerns about specific courses of action within one department they're familiar with, that usually reflect incremental improvements on economic planning. Typical quote: [actually the media never covers this sort of thing, except, oddly, the Volcker rule]
Most people don't have significant amounts of wealth stored as piles of green paper. Your home, your shares, your land, etc, are not "devalued" in any way, shape, or form by inflation.
Do you know, however, what most people have that is devalued by inflation? Debt.
You are not alone. This is not normal. None of this is normal.
Theoretically at least, the US Government has to answer to its citizens
ahahahahahahahahahha