ForexMinute.com – Bitcoin has always been considered to be under scrutiny of potential attackers who are waiting for any loophole to make their malicious move and get away with people’s hard earned investments within a matter of minutes.
But indeed, stealing this cryptocurrency is not close to the traditional ‘show-the-gun-to-cashier-and-take-the-money-out’ procedure. Instead it is more about taking the maximum control of the Bitcoin processing power, so as to drive the market on your fingertips. When Bitcoin miners collaboratively possess the 51% of total Bitcoin network by forming a pool, they are automatically given the power to confirm transactions. It simply means they can confirm transactions that doesn’t even exist, while can also generate an innumerable amount for their mining procedures; unethically indeed.
This is called a 51% Attack and quite speculatively, it might right be happening inside the renowned and one of the largest Bitcoin mining pools GHash.IO.
The Netherlands-based company currently contributes to over 30% of the total Bitcoin mining operations, making it #1 pool in the Bitcoin market. So indeed the speculations of it being compromised has come like a shock to the entire Bitcoin community. According to the reliable sources, the GHash.IO recently ticked the 51% possession of the entire Bitcoin blockchain, following which they could easily reap 100% rewards to themselves.
Such a news can single handily destroy Bitcoin from its core. Although, GHash.IO went back to becoming a good-old-honest pool as soon as the word about their treachery made public.
Experts from Bitcoin community meanwhile reacted vigorously to this event. Two of them were Cornell computer scientists who, in a same tone, wrote:
“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 choose. Bitcoin is currently an expensive distributed database under the control of a single entity, albeit one whose maintenance requires constantly burning energy — worst of all worlds.”
And it is indeed correct! There is no doubt that any such attack can tank Bitcoin value overnight, especially in times when major businesses are betting on it. Even now when the news of GHash.IO capturing the Bitcoin network hit the market, the coin’s value dropped excessively. In real, it won’t take minutes for it to reach $100 from $600.
The only way such attacks can be avoided is by a hardfork, which has its own disadvantages though temporary. The other way around can be to create a P2P network of mining nodes, which snatches the rights to control the entire Bitcoin blockchain from malicious pools.
For now, Bitcoin seem to be safe. The question however is, FOR HOW LONG?
To contact the reporter of the story: Yashu Gola at email@example.com
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