The Litecoin Community is currently coming together to deal with one of cryptocurrency’s most existential threats: that of a 51% attack. At this point, Coinotron has not attempted any sort of malicious activity. In fact, Coinotron has stated that: “I have contacted with our biggest miners. We are working on solution to mitigate risk of Coinotron’s hashrate raising over 50% of LTC network hashrate.” However, in the days since that message, Coinotron’s hashrate has not dropped at all. For the last several days, Coinotron has had an uncomfortably large percentage of the Litecoin network hashrate under their control. Coinotron has proven unwilling to take drastic action (fee increases, etc) to reduce their portion of the hashrate. It is up to individual miners to make the move, in the interest of Litecoin’s continued longevity. CCN’s stance has always been to encourage miners to use P2Pools to avoid this very problem.
UPDATE: Cryptocurrency enthusiasts should demonstrate the strength of the community by turning on dusty GPUs and pointing them towards one of Litecoin’s lesser pools, or better yet a P2Pool. GPU Miners that have turned to other Scrypt altcoins, such as DOGECOIN, should consider pointing their miners towards Litecoin in a show of camaraderie. That means YOU. Hell, if enough people used Litecoinpool.org’s CPU Web miner , the large centralization of ASIC hashpower could still be counteracted. That’s a huge if, and this writer does not recommend you use the web miner if you are on a laptop, at all, or on a desktop, unless you are already monitoring your CPU temperature and are aware of what the temperature threshold is.
Why Don’t We Want A Pool With 51%?
Pooled mining is the most popular way for individiual miners to smooth our their expected income over a period of time. Without pools to join, individual miners would all be competing against each other for 1 block every ~10 minutes. Even with several TH/s it might take weeks for you to find your own block in this manner. Mining is, for all intents and purposes, transaction verification. An attacker that controls more than 50% of the network hashrate can, for the time that he is in control, exclude and modify the ordering of transactions (in blocks he relays). As a group (usually a pool) nears this 51% of network threshold, the likelihood of being “in control” of consecutive blocks increases.
If Coinotron controls a large enough portion of the Litecoin network hashrate, the pool operator could:
- Reverse transactions that he sends while he’s in control
- Prevent some or all transactions from gaining any confirmations
- Prevent some or all other generators from getting any generations
- Double spend Litecoins
However, Coinotron’s pool operator won’t be able to:
- Reverse other people’s transactions
- Prevent transactions from being sent at all (they’ll show up as 0 confirmations, indefinitely)
- Change the number of coins generated per block
- Create coins out of thin air
- Send coins that never belonged to him
Litecoin Community’s Reaction
Together, the top 20 miners on Coinotron represent almost 86 GH/s worth of hashing power. For comparison, this means that 20 registered miners currently control about 86/231=37% of the total Litecoin network hashrate. Clearly, Scrypt ASICs have been shipped to certain miners in large quantity. Considering that Innosilicon’s A2 Terminators required a minimum quantity order of 100, it’s safe to say that we are seeing Terminators in action. Reports from coinotron members show that over the last few weeks, the top miners on Coinotron have been splitting their hashrate to new accounts. This means that the top 20 mining accounts on Coinotron are likely controlled by less than a dozen individuals. If just a handful of them switched to a different pool, then this crisis could be ended.
Coinotron’s Bitcointalk thread has seen some concerned citizens and the Litecoin subreddit has been actively raising awareness on this occurrence for the last day. However, the Litecoin subreddit is one of the least active altcoin subreddits, especially when contrasted with Litecoin’s high market capitalization. The Litecoin subreddits have stickied a warning post to the top of their front pages, to no avail, it seems.
The Bitcoin Network’s Brush With Disaster
Near the beginning of 2014, the Bitcoin Network experienced a similar event. Ghash.io, the pool used by cloudhashing platform Cex.io, was nearing 51% of the total Bitcoin Network hashrate. CCN’s call to action on the matter received several hundred upvotes in the Bitcoin subreddit, rising to the top of the front page. /r/Bitcoin usually has several hundred to over a thousand users online at any given time. As such, the message was spread far and wide and Bitcoin miners that saw the warning were able to pull their miners away from Ghash.io to smaller pools. The aggregation of mining power at Ghash.io was easily explained by Ghash.io’s lack of a fee structure: 0% in fees is understandably attractive. Another compounding factor was that users of Cex.io, the most popular cloudhashing service at the time, were forced to use Ghash.io as their pool. Shortly after the heavily publicized incident, Ghash.io released a statement to calm the Bitcoin community and show their dedication to the Bitcoin community and renew their vows to never commit a 51% attack, besides this type .
TL;DR: If you have any Scrypt mining hardware, be it an ASIC or a GPU, and you are mining on Coinotron… Please switch to a different pool. The community has come together to defeat this very threat every time it has cropped up. Share this message with any Litecoin miners that you know… Especially if they just received a large shipment of Scrypt ASICs.