A pool of Bitcoin miners that grew to own 51% of the processing power necessary to produce new digital coins has been hit by a distributed denial of service (DDoS) attack.
GHash’s website became unavailable yesterday, redirecting to a non-live version, after news broke that the mining pool effectively had a controlling share in the cryptocurrency.
Bitcoiners have speculated that the DDoS attack came in response to the news from Cornell University that GHash had repeatedly broken the 51% threshold, giving it the ability to extort higher transaction fees and reject other people’s transactions.
Two Cornell computer scientists said in a widely-quoted note: "Is this really Armageddon? Yes, it is. GHash is in a position to exercise complete control over which transactions appear on the blockchain and which miners reap mining rewards.
"They could keep 100% of the mining profits to themselves if they so chose. Bitcoin is currently an expensive distributed database under the control of a single entity."
Bitcoins are created, or ‘mined‘, when people use large amounts of processing power to solve complex maths equations on a vast, public virtual ledger called blockchain.info.
Miners often pool their resources to share the rewards of their greater collective power, at the same time meaning transactions – which are put through by the same process as mining – are far quicker than through banks.
However, because of a key tenet of the Bitcoin code, the pool with the greatest processing power can also control which transactions are confirmed and which are not, because Bitcoin will always confirm the transactions with the greatest processing power behind them over any other.
A spokesman for GHash said the pool had no intention of manipulating its power like that, and the group’s mining power has since dropped to around 27%, though that decrease may just be temporary.
However, it breached the 51% threshold in spite of a promise it made back in January not to do so.
The pool has declined to comment on reports of the DDoS attack.
This article is from the CBROnline archive: some formatting and images may not be present.