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posted by martyb on Monday June 16 2014, @11:55AM   Printer-friendly
from the mine!-mine!-mine! dept.

Fears and warnings about the consequences of a single entity obtaining majority network power have been known for some time, but have generally been dismissed as not conveying enough control to be worthwhile.

For the first time, and for several extended periods, the GHash mining pool delivered 51% of the bitcoin network hashing power, despite promises that they would never cross the 50% threshold.

Although GHash did not take advantage of its monopoly power during these times, it does seem that we have crossed a threshold. How do you trust the blockchain to an anonymous monopoly?

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  • (Score: 3, Interesting) by Horse With Stripes on Monday June 16 2014, @12:01PM

    by Horse With Stripes (577) on Monday June 16 2014, @12:01PM (#55857)

    So now they have the power to validate any block chain, even if it's not a legitimate transaction. In fact, they are now in the position to validate fake transactions that they themselves generate. I'm not saying that they will, but they can.

    With the semi-anonymous nature of bitcoin, and this self-validating capability, how can any transactions be trusted, let alone all of them?

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  • (Score: 4, Interesting) by d on Monday June 16 2014, @12:20PM

    by d (523) on Monday June 16 2014, @12:20PM (#55862)

    From what I know, they can't authorize fake transactions, but pick which they accept and which not. IMHO people should see that as a threat and choose to pick another pool.

    • (Score: 2, Informative) by Horse With Stripes on Monday June 16 2014, @12:47PM

      by Horse With Stripes (577) on Monday June 16 2014, @12:47PM (#55871)

      Can't they validate a fake transaction then? What if they hold up a pending transaction, generate a fake transaction transferring the bitcoins to a wallet they control (rather than the intended recipient), then accept and validate their version of the transaction? Isn't that technically possible with the 51%? Their block chain would trump the others.

    • (Score: 2) by geb on Monday June 16 2014, @01:34PM

      by geb (529) on Monday June 16 2014, @01:34PM (#55886)

      There's not a great deal of difference between generating a fake transaction, and making a real transaction but then invalidating it immediately afterwards.

      "What? You think we paid you? Haha. Deal with the new reality. We just changed history to say we didn't pay."

  • (Score: 3, Interesting) by Geotti on Monday June 16 2014, @04:56PM

    by Geotti (1146) on Monday June 16 2014, @04:56PM (#55993) Journal

    Well, maybe they should get rid of the Feds silk road stash and distribute it across all wallets?

  • (Score: 1, Informative) by Anonymous Coward on Monday June 16 2014, @06:27PM

    by Anonymous Coward on Monday June 16 2014, @06:27PM (#56041)
    • With a sane definition of "fake", they can't generate (nor validate) fake transactions (they would not be accepted by the rest of the network anyway)
    • They can't steal your bitcoins
    • They can, with a higher probability than before, generate a transaction with their own bitcoins, wait for the recipient to accept it in exchange for money/goods/..., then generate a second block that will replace the first one and cancel this transaction ("double spend attack"). They could also probably cancel a transaction by someone else by the same method.
    • But this probability is not all-or-nothing when they reached 51% of hashing power; anyway, for large amounts, recipients wait more than 1 block confirmation, and rather up to 6 blocks. They would need a far higher hashing power to replace 6 blocks in a row to do a double-spend.