GHash.IO is closing in to 51%, get out now
All Bitcoin miners please take note that GHash.IO has in the last 24 hours gained more than 42% of the entire Bitcoin hashing power, effectively making them the biggest Bitcoin mining pool in the world. Miners at GHash.IO are requested to spread the hashes and consider joining some smaller pools for a more decentralized hashing distribution. If they control more than the majority of the network’s mining hashrate, they would have full control of the network and would be able to manipulate the public ledger or blockchain at will, the so called 51% attack. It is considered as a major flaw in the Bitcoin design.
What is a 51% attack
When a single entity controls more than 50% of the entire network’s hashrate, it is possible to launch a 51% attack on the Bitcoin system. They would receive advantages in the network which could be misuse for personal gain. It is a serious threat to the Bitcoin system and the currency would be lost with its value declining rapidly. Theoretically, it could happen but still there are things that they could not do like reverse transactions that happened before they are in control.
The attacker can:
- Reverse transactions that he sends while in control (This has the potential to double-spend transactions that previously had already been seen in the block chain)
- Prevent some or all transactions from gaining any confirmations
- Prevent some or all other miners from mining any valid blocks
The attacker can’t:
- Reverse other people’s transactions
- Prevent transactions from being sent at all (they’ll show as 0/unconfirmed)
- Change the number of coins generated per block
- Create coins out of thin air
- Send coins that never belonged to him
With 42% of the total network hash power, it is getting near to the 51% mark. You can check the current hashing power here.