Bitcoin Could Collapse at the Hands of ‘Selfish’ Users

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It seems that bitcoin could suffer if selfish users hoard the currency and hijack accounts, at least that's the word from two researches at Cornell University.

Ittay Eyal and Emin Gun Sirer say that they have worked out that this selfish mining group would need more than 33 per cent share of the computational power used for mining coins to upset the system.

Apparently this has already happened as some groups regularly break 25 per cent of the global bitcoin mining power, with a few hitting the 33 per cent mark.

Why is this so bad though?

Well, due to how bitcoin is produced through complex algorithms solved by computers, Eyal and Gun Sirer believe that it would be possible for "selfish miners" to hijack the currency and overwrite the shared record of transactions.

"The bitcoin ecosystem is open to manipulation, and potential takeover, by miners seeking to maximise their rewards," Eyal and Gun Sirer say in a recently published paper on ArXiv.

"The protocol will never be safe against attacks by a selfish mining pool that commands more than 33% of the total mining power of the network."

While bitcoin transactions are secure, the actual mining of bitcoins has the potential to be blown open and devalue the worth of previously mined coins.

This is because bitcoin mining creates a blockchain which is used to verify correctly mined coins and confirm each coin's value. This blockchain is only recognised as valid by the latest or longest version of it. And it's because of this that the researchers see it as a risk.

They believe that a "selfish" mining group would pool resources together and create a private blockchain – as opposed to the public one that exists by other miners. Doing so means that when their blockchain is released, if it's longer than the latest publically available chain, it'll destroy the value of the work done by others.

So far bitcoin has enjoyed a close-knit community of users who are all in it for similar reasons. Unfortunately, that won't always be the case as the currency becomes more prominent.

Thankfully, a vague solution was put forward: get miners to write to random blockchains to eliminate the risk of a selfish set of users ballooning.

 

 

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