Bitcoin Mining Pool Ghash.io Is Open For Discussion…But Still Unapologetic

Journalist:
Caleb Chen @bitxbitxbitcoin
June 16, 2014
Bitcoin Mining Pools will meet to discuss a permanent solution to the threat of a 51% attack

In response to community concerns, Ghash.io has posted to Cex.io’s blog regarding the threat of a 51% attack presented by Ghash.io’s rapid growth, as promised by Jeffrey Smith. In their blogpost, Ghash.io restated their “intention to help protect and grow the broad acceptance of Bitcoin and categorically in no way harm or damage it.” In the same breath, Ghash.io explained that they are firmly against temporary solutions such as the implementing of a pool fee. The still largest Bitcoin mining pool revealed that, in their opinion, they were being punished for their success. Furthermore, they feel that they current situation is damaging to Ghash.io/Cex.io and also the growth and acceptance of Bitcoin long term. As such, Ghash.io declared their intention to host a round table with leading mining pools and the Bitcoin Foundation to discuss and negotiate “ways to address the decetralisation of mining as an industry.”

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[dropcap size=small]E[/dropcap]xcerpt from Ghash/Cex press release:

We do fully recognise the concerns and possible threat posed by an entity with malicious intent taking control of enough mining power to exploit the 51% scenario, but we also have confidence and agree with the views expressed by the Bitcoin Foundation that any such exploitation or attack ”would be obvious it was happening, and pretty easy to defend against. The transparent nature of the blockchain provides unprecedented insight for all to investigate and report such behaviours.

We also recognise however that a long term preventative solution to the threat of a 51% attack does have to be found, the current situation we find ourselves in (essentially being punished for our success) is damaging not only to us, but to the growth and acceptance of Bitcoin long term, which is something we are all striving for.

To that effect we are in the process of arranging contact to the leading mining pools and Bitcoin Foundation to propose a ‘round table’ meeting of the key players with the aim of discussing and negotiating collectively ways to address the decentralisation of mining as an industry. Our aim is to do this quickly with a possible date coinciding with the CoinSummit Conference in London.

Cex.io’s full statement can be found here.

What Does The Bitcoin Community Want?

What the Bitcoin mining community really wants is simple: a handful of pools to choose from that all agree that the threat of a 51% attack is real and not worth the extra website hits. In fact, this was the general attitude of the Bitcoin mining network in the days prior to the advent of cloudhashing and the ready availability of hosted mining solutions. Very specifically, prior to the arrival of Ghash.io, no Bitcoin pool had successfully combined a Bitcoin mining pool with another lucrative Bitcoin service in a way that would allow 0% pool fees to be a cornerstone. 0% fees, in and of themselves, are not dangerous in any way, shape or form. However, prior to the arrival of Ghash.io, no Bitcoin mining pool was ever this unapologetic and unwilling to “play by the (suggested) rules.” In the past, when Bitcoin mining pools became too centralized, not only would miners themselves leave the pool on their own volition, but also the mining pools themselves would halt registrations or raise fees to encourage the decentralization and health of the entire Bitcoin network. While experts agree that a 51% attack would be easy to defend against, the loss of confidence in the network isn’t as easily defensible. Ghash.io has even experienced a DDOS attack from anonymous members of the community as a part of this ongoing situation.

Nowadays, there are many cryptocurrency miners that are in this game purely for the profit: Thus is the price of going mainstream. Previously, the difficulty in obtaining, comprehending, and setting up a miner stood as a barrier of entry to many despite the whispered promises of ridiculous return. Only people that truly believed in the longevity of Bitcoin (or digital currency), and hence Bitcoin mining, would expend the effort to setup Bitcoin mining equipment. After all that effort, the last thing a rational miner would do is point his or her hardware at a pool that contributes to the instability of the mining network. Sometimes, I fear that there are “Bitcoin miners” out there that might not even be aware of the current Ghash.io fiasco. On the other hand, I have no doubt that there are many “Bitcoin miners” that aren’t aware that this very scenario played itself out half a year ago. A set mitigation plan, as BTC Guild has enacted, isn’t a “temporary solution” if it is adhered to permanently. BTC Guild hasn’t gotten anywhere near 40% of the total Bitcoin network hashrate since their stated decision to stand by said plan. Before Ghash.io sauntered into the Bitcoin mining scene, every pool operated in the best interest of the Bitcoin network. Namely, they all agreed that the threat of a 51% attack as presented by mining pool centralization is an unnecessary risk and were willing to sacrifice to prevent it. Ghash.io has reaffirmed that they are adamantly against this high-level Bitcoin idealism, and they are leading the discussion on a different solution, since they don’t believe in the solution that has kept the Bitcoin network decentralized for the last 5 years.

Luke Jr., a longtime Bitcoin mining pool operator:

Inter-pool discussions including addressing decentralisation of mining as an industry have been ongoing since 2012 on both mailing lists and IRC. GHash.io is the only major pool that has not been involved in these to date. It’s ironic they propose “starting” what everyone else has been doing for years.

What kind of “solutions” do you think the Bitcoin Foundation and Ghash.io will come up with? How do they compare to pool mitigation plans? Comment below.

Last modified (UTC): June 16, 2014 23:31

Tags: ghash.io
Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.