Slashdot Mirror
Bitcoin Security Endangered By Powerful Mining Pool
An anonymous reader writes Ars Technica reports that for the first time in Bitcoin's five-year history, a single entity has repeatedly provided more than half of the total computational power required to mine new digital coins, in some cases for sustained periods of time. It's an event that, if it persists, signals the end of crypto currency's decentralized structure."
If you control 51% of the hashing power in the network, you can modify the block chain while simultaneously self-verifying your version as the one-and-true block chain.
Well the thing is, getting 51% doesn't mean you can steal any coins. It means you get to control who can and cannot spend their coins. Also you would be able to do "double spends" of coins in certain situations. Getting 51% means you control the transfer service not the coins themselves. Also it would be really really expensive and once you stop the network will start working as normal again.
The original idea was millions of end users running Bitcoin mining as a background job on their CPU. That's totally dead.
The author of the original idea bets to disagree:
Long before the network gets anywhere near as large as that, it would be safe
for users to use Simplified Payment Verification (section 8) to check for
double spending, which only requires having the chain of block headers, or
about 12KB per day. Only people trying to create new coins would need to run
network nodes. At first, most users would run network nodes, but as the
network grows beyond a certain point, it would be left more and more to
specialists with server farms of specialized hardware. A server farm would
only need to have one node on the network and the rest of the LAN connects with
that one node.
That is from Satoshi Nakamoto's post from 2008: http://www.mail-archive.com/cr...