Topic: Newbie question: Understanding the last bitcoin crisis (Read 688 times)

Worrying about the 50% thing is in some ways like worrying that your neighbour owns a carving knife. Theoretically he could stab you in your sleep, but the risk/benefit ratio is probably dissuading him from doing it, even if your dog craps on his lawn.

However, it is distasteful in other ways, since then bitcoin becomes susceptible to a single point of failure, hack, government seizure, natural disaster etc which would have a very bad effect if the pool or mining corp had over 50%. In some ways it's more like your neighbour leaving his knife on display on the front porch with it saying to miscreants, "Come, steal me, use me for evil." i.e. the pool simultaneously becomes the biggest target and the biggest weapon.

But also, a pool is not a unified object unless used very subtly, it consists of thousands of would be conscientious objectors, independent miners, who can refuse to participate and lend their power to another pool. More worrying would be a monolithic mining corporation, although likely owned mostly by shareholders, those are typically non-voting shares, so the person in control would have a free hand to abuse their trust.... 18 months later the lawsuits might have an effect, but in the mean time, things could get bad. But no mining corporation is anywhere near this large yet.

Mining pools can't force their miners to mine. Remember, miners are mostly in it to make a profit, so if they discovered that their pool was attempting to attack the network (which would greatly reduce the value of Bitcoin, and hence the miners' profits), they would switch to different pools, and the attacking pool would no longer have the power to carry out its attack.

A single entity controlling more than 50% of the mining power is theoretically a potential problem, because that entity theoretically has the potential to disrupt the system.

Mining pools don't act like banks.

We already suffered a fork in the block chain. That was the first crash of Bitcoin. It was fixed within 24hrs. Those who sold on panic feel foolish now.  

Well... just imagine a governement building a computation center with the purpose of holding a great % of the computational power. Something like a secret basement full of custom ASIC miner...

And, unlike with a banking crisis, we (the people ) can reorganise and switch to change the balance of mining power.

I don't know if Satochi ever thought about the phenomenon of mining pools. But I wouldn't say that it is a major flaw, it is how Bitcoin is designed. The community is not even sure yet if the 50% is the critical boundary to attack Bitcoin or if it can be done with an even lower percentage of hashing power.
I'm not even sure if somebody would ever wanted to do that. If something like that would happen, maybe Bitcoin would fail all together. Then the attacker wouldn't get anything out of it, except killing Bitcoin.

Hello!

I have a question about bitcoins (not surprising).

I didn't understanded the last bitcoin crisis, in which there was a mining pool holding almost the 50% computing power of the Bitcoin network. Isn't that a major flaw?

I mean, BTC was designed to avoid governements, banks and regulatory entities, but... doesn't the mining pools acts like banks?

Thank you for reading me