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Bitcoin miner's control over minting new coins creates security risks, researchers say

Bitcoin miner's control over minting new coins creates security risks, researchers say

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A single bitcoin-mining network has repeatedly supplied more than half the computational power necessary to mint new bitcoins, undermining the decentralized nature of the digital currency and creating new security concerns. Ars Technica reports on new research from Cornell University showing that GHash, a top mining pool whose leaders are unknown, performed more than 51 percent of all cryptographic hashing on at least five separate occasions beginning June 3rd. One of those periods lasted for 12 hours, according to the researchers.

GHash's computational feat is significant because an entity with majority control over bitcoin creation — a so-called "51 percenter" — gains powers over the network that could undermine its security and reliability. With majority control, a miner could spend the same coins twice, demand higher fees, or even mount a denial-of-service attack on the bitcoin network, according to the researchers. There's no evidence GHash abused its power while it had majority control, but the mere fact that it has become possible to centralize mining power is a worrisome sign, they said. GHash has previously been accused of double-spending bitcoins on a gambling site. "Having a single entity in GHash's position, of holding 51 percent of the mining power, of being in a monopoly position, of being able to launch any of these attacks at will, completely violates the spirit and intent of bitcoin as a currency," researcher Emin Gün Sirer told Ars.

GHash did not respond to Ars' requests for comment. Some members of the bitcoin community say concerns over 51 percenters are overblown, arguing that abusing their authority would have immediate consequences and work against their own economic interests. But a large part of bitcoin's appeal has been its relative independence from the centralized authorities that govern fiat currencies. The longer that large networks are able to gain majority control over bitcoin cryptography, the more bitcoin could come to resemble the currencies it was designed to replace.