Ghash.io Offers More Empty Promises To Bitcoin Miners

Ghash.io is still currently the largest Bitcoin mining pool, based on data from the last 48 hours . In June , the media had a frenzy over the fact that a Bitcoin Mining pool had over 50% of the total network hashrate, thus presenting an unnecessary threat to the health of the Bitcoin network. Currently, they are sitting at around 30% of the total Bitcoin network hashrate and today it has been revealed that they plan to never go above 39.99% ever again. Unlike BTC Guild, Ghash.io does not have a set mitigation plan involving raised fees or closed registrations to back up their promise. In addition to promising to do something that all other Bitcoin mining pools have been doing already, Ghash.io recommended their move to other Bitcoin mining pools. As such, some in the community have been questioning the disconnect  between Ghash.io and the Bitcoin community.

When Ghash.io first made the announcement  that they would hold a “round table meeting of key players with the aim of discussing and negotiating collectively ways to address the decentralisation of mining as an industry,” many viewed the action as slightly convoluted, and they wondered how well attended the event would be. Luke Jr., a longtime Bitcoin mining pool operator, put words to the uneasy feeling those in the Bitcoin mining community felt:

“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.”

One month ago, Ghash.io claimed to be in the process of contacting leading mining pools (and the Bitcoin Foundation) to attend their highly-hyped Bitcoin mining pool round table. In reality, the round table featured 5 participants: PeerNova , KnCMiner , SpoondooliesTech , and the Bitcoin Foundation . In case you were wondering, none of the participants were Bitcoin mining pools (though KnCMiner does provide roughly 4% of the total Bitcoin network hashrate right now from their personal mine alone). Cex.io has stated that all invited Bitcoin mining pools either refused or ignored their invitations.

The Results Of The Bitcoin Mining Round Table Attended By One Bitcoin Mining Pool

According to CoinDesk’s Stan Higgins , who has reportedly seen documents from the round table meeting, all parties involved agreed that the continued centralization of mining power is best to be avoided. The meeting attendees also convinced Ghash.io that temporary solutions, which Ghash.io had previously vocally eschewed, are all the community has until a more permanent solution can be found. On the topic of a more permanent solution, Ethereum’s Vitalik Buterin recently told a crowd at the Bitcoin in the Beltway Conference that the Bitcoin Foundation’s Approach to the entire matter was and still is “recklessly conservative .” Vitalik’s chief concern is that the Bitcoin Foundation will always be conservative in implementing any sort of fundamental changes to the code, partly due to lack of funding for such projects.

The immediate result of the round table is simple: Ghash.io has committed to staying under 40% of the network hashrate. Ghash.io has stated that they will ask “miners to shift hashing power away from their pools when the hash rate reaches that amount.” The further details on how they plan to commit to their promise, beyond posting warnings again, has not yet been revealed. Fellow Bitcoin mining pool, BTCGuild, which also had a brief brush with undesired centralization, came up with a Mitigation Plan  that they have been following for over a year. In contrast with Ghash.io’s promise to post a warning if their pool ramps up to over 40% of the Bitcoin mining network, BTC Guild promises to raise fees and even halt registration should centralization become a problem. The community is very clear on which Bitcoin mining pool’s temporary solution is preferred.

What Happened To The Last Promise?

Previously, when this incident happened in January of 2014 , Ghash.io/Cex.io promised that they would allow Cex.io customers to point their rented hashrate at the pool of their choice. Cex.io’s Jeffrey Smith has since expressed multiple times that implementing this is nearly impossible given Cex.io’s system where users do not have direct control over the hardware they pay for. However, Ghash.io/Cex.io has not publicly abandoned this plan completely, since that would be a blatant broken promise.

How Does The Future Look?

The other result of the Bitcoin Mining round table attended by one Bitcoin Mining pool is a little bit more hopeful, or more of the same hot air, depending on how you look at it. Ghash.io, in conjunction with their subsidiary Cex.io, will head an Action Committee. According to the document:

“The committee will drive closer communication and cooperation between developers working on the bitcoin protocol and solving the 51% issue, and businesses, highly interested in expanding the industry and promote bitcoin to a broader audience.”

Ghash.io is hoping to populate this committee with those individuals and companies involved in the Bitcoin mining industry, hopefully, including some actual pool operators this time. According to TechCrunch , Ghash.io will be releasing a “policy document” in the next few weeks to work out the finer financial details behind the new Action Committee. Ghash.io/Cex.io has promised to direct funds towards this research, and no matter the public sentiment regarding Ghash.io and Cex.io, research into a permanent solution to the threat of a 51% attack should be something that all those involved with Bitcoin mining, and cryptocurrencies in general, can get behind.

Ghash.io’s official statement on the matter can be seen on their blog .

Featured image from Shutterstock.

Updated 12:01 CST 7/17/14 to include comment from Ghash.io/Cex.io.