Topic: Why are people drawn to GHash.io, and how can we reverse it? (Read 5004 times)

That should be a hypothetical 51% attack.   If some pool does cross that threshold it doesn't mean there will be such an attack.  Besides it would be a stupid crime, risk of being caught almost certain and potential gain is probably negative when the costs are factored in.  So I would have to disagree ... .16% extra income per week is a HUGE deal.   On the other hand there are probably even more advantages of being in a large pool, as you often get to unfairly start working on the new block before other pools do.   

=== OFF TOPIC NOW, just my view ===
When it come to fiat currency, identity theft costs billions, but people live with it.  I personally think bitcoin would be better off if there was a 51% attack.  It would probably survive just fine only shaking out the weak players.   After that people would actually have more respect for bitcoin knowing that it is reasonably safe.  Anyway, it simply isn't possible to have a complex system without some risks.  To me the problems with handling the keys for accessing one's wallets is a vastly larger risk than any 51% attack.   

Why are people drawn to GHash.io?
Because they provide conversion of Bitcoins into fiat by selling hashing power to investors.
Investing is bad for the Bitcoin economy though, we should be replacing fiat, by spending Bitcoins into circulation.

How to stop big pools?
Needs to be done on the protocol somehow.
How about the bigger the pool the more Bitcoin dust it has to process?
If people saw they were disadvantaged on bigger pools they'd be more inclined to switch to smaller ones.

How to improve P2Pool?
Payment every 24hrs? When I see micro payments it puts me off. You need a lot of GH to get 0.001BTC (above dust) payouts. This is one of the highest entry barriers to mining on a pool anywhere. Still I use it as my backup pools, because it requires no account, and you get virgin unspent coins with no history.

BTW: www.p2pool.org is not the only option. Also check out http://p2pool.hostv.pl/ for a list of others.

+1

Maybe not alone, but when combined with sleek looks, yes, yes it is clearly worth it risking bitcoin over.

I think people are sending a message to the big bitcoin adversaries: Please launch a bitcoin attack pool.  Just payout 10% higher than any other pool, make sure the website is sleek and we will join!

Only NMC has value, and Bitminter already has it. DVC and IXC nearly has no value, together they add 0.16% extra to your mining income.

0.16% extra income is worth the possibility of 51% attack on Bitcoin?

I didn't like the look of the Bitparking site. Also GHash looks more professional.

Bitparking does all of the above and I0C as well.  Last time I checked DVC, IXC and I0Cwere completely worthless.  Probably 51'd by GHash.io already.

GHash.io does have something other pools don't have. You are merge mining NMC, DVC, IXC and BTC at the same time.

I was with Bitminter, and after discovering the additional merge mining. I switched to GHash.io.

What's wrong with bitminter itself?

We need a benevolent DOSer to fuck Ghash.

Unfortunately for Bitcoin, I am afraid that many people share your priorities.  Bitcoin can tolerate masses of it's users being greedy, but it may have a harder time weathering masses of short-sighted, irrational investors.  Mining bitcoins has been a losing investment in terms of BTC for most smaller players, yet the fact that people still irrationally gravitate towards it as a good investment helps to keep it that way.  Rational investors just need to steer clear of markets at which the uninformed masses are blindly throwing their money.  But that is just the investment side of mining.

People might still be wiling to mine at a loss in BTC terms, (though hopefully still profitable in fiat), for the sake of securing the network, to guard against double spends, empty blocks, and centrailization in general.  To those people we all owe our gratitude.  They are still being greedy though, as they want to protect the value of their bitcoin holdings in the long term.  It is far-sighted, long term greed.

Bitcoin is dependent on people caring about decentralization, especially its investors.  hyphymikey, your priorities did not include supporting well-being of the network.  Would you prefer a pool that returned 100% because of no fees, an extra 5% payout from double-spend proceeds, and 5% on top of that just because the pool wants to encourage you to stay with them?  The ignorance of miners is bitcoins biggest weakness.  Such a pool is a valid attack vector on the protocol, and it is enabled by short-sighted, ill-informed 'hashers'.  It would be the cheapest and easiest way for the government to attack bitcoin.

Start pool and hire the best people to make it slick and easy.  Payout 110% (this is subsidized, remember?  Attract the massive number of people who bought hash power to make a quick buck and don't care about Bitcoin as project.  And boom, your over 50%.  Actually, make that two seemingly different pools at 30% each.

I have been testing a linode stack scripts automated p2pool hosted vps with the prime directive of miners currently at gnash.io incentive to leave while helping promote truly decentralized p2pool. Not sure if this will attract miners from gnash.io but the idea is to offer miners with a free p2pool vps that is setup and deployed for them in minutes, and makes things people either love, or hate, like merged mining, already set up and good to go. I think it would be best if the entire setup is and was audited by trusted well known people if possible, and I could use help of course! I do not have the financial wherewithal to support this indefinitely but I am able and willing to start with a 2 or 3 btc worth of hosting. I have been testing on linode vps but it would probably require dedicated hosting with some sort of stack-script like solution to be as cost effective as possible. I am not sure if this is something that may get some of the "independent" miners to take action but I am sure its worth trying, if not this then something ... Is this the type of thing you would support? This is by no means a perfect solution, not even sure if it is a good one but its an idea and now its yours to judge. If someone has a better idea I would happily donate my btc I am about to spend on hosting and use it in some other way.

If any pool had the ease of use of bitminter, with the lowest fees, and would advertise with mining manufacturers as the "go to place" it would take over.

What I'm looking for in order:

1. Ease of use
2. Consistent payouts (Larger the pool the more consisten.. You get larger by advertising you ease of use)
3. Fees (Some pools are 1%, that's cheap to me. So paying it over 0 isn't that big of deal)

Which is why I wonder why any miners want to mine at a pool which mines very small blocks, intentionally delaying thousands of perfectly valid transactions by keeping them out of every block they mine.  Just compare the sizes of Ghash.io blocks with blocks from Bitcoin friendly pools.  Miners must be blind.  If it isn't intentional, it must be due to gross incompetence.

I wonder why the Ghash.io is trying so hard to destroy bitcoin.  They haven't done anything to reduce the size of the pool, and keep mining microblocks.  When one pool operator which already is known to deny most transactions gets to decide for themselves which transactions will go into blocks and not, Bitcoin have lost one of its most important properties.  Instead of being a distributed currency, it is a currency controlled by one malicious pool.

Right - not a coincidence. It is obvious they diluted the commodity. I just don't want to invoke the wrath of the severely pro/con cex.io people here because cex.io is irrelevant to the current hash rate. Those miners are mining regardless of whether you or I have rented them or they are currently not rented to anyone. The pro/con debate over cex.io being a way to make money hasn't been resolved yet, so it is unlikely to be resolved in the midst of this current issue, but bringing it up it is likely to make it harder to focus on the real issue if people can't get away from it.

cex.io is part of the problem, I was trying to convince people to stay away from the place and keep their money out of it. This is not going to stop the miners they already have but would probably slow down their expansion.

About 3 weeks ago a sell off at cex.io started which saw the price dropped from 0.072 to 0.032 at the end of last year. 2 days ago I noticed ghash.io had 33% network share and today 40%. Coincidence?

Features drive the market at times (esp. when people keep asking for them), when you have 3x alt coins on merged mining, give the people something they've been asking for a long time (auto-split payouts) and then to sweeten the deal, you also get 3% of any referrals bought cloud hash speed (which for me is almost 20GH/s)... also alerts that are really persistent & accurate...

Well, maybe now some of the pool owners whom turned down the idea of auto-split percentages (and other features) will reconsider, until said day, I'm pretty sure there's going to be a lot of hashing power going to ghash.io just due to the features it has over other pools.

I'll try to make it clearer. The OP and the point of this and other threads is the hash power not the potential for someone to gain or lose trading at cex.io. It is completely irrelevant if everyone sold their cex.io hashing power today at a loss or gain. Ghash.io would still have the hash power and possibly even more incentive to do something untoward with the blockchain. People are pointing their own miners to ghash.io. That's what OP wanted to figure out how to stop, or at least slow.

This.

What are the cost of these incentives when you are holding a paperweight at some point and all your "payouts" are in the form of private keys that are worth nothing?  What if all these great incentives aren't the result of supply and demand, rather artificially propped up in hopes of luring miners in so a 51% can be achieved?

That isn't what I said.  Merely pointing out that anyone with deep pockets who could profit off the destruction of bitcoin has likely realized an avenue to compromise bitcoin.  Create something bright and shiny for the miners, use their ignorance to turn them against the bitcoin network.

the biggest incentive (I see) for using CEX.io/Ghash.io is one major thing, a lot of pool owners have said no to...

auto-payouts with splits by percentage

Which makes it tons easier when I have a friend that wants to throw some money down on a miner and have me toss in the rest + host it, then I just have to put in an address and what % he gets, what % I get... and nothing else. No more screwing around with spreadsheets, no more bullshit.

Awhile back I asked several 'group buy leaders' in PM how they did the split %'s on shares in miners, the answer I always got back was 'spreadsheet'. Seriously, a spreadsheet... I was debating on making something to handle the splitting for myself in PHP or some other language, however CEX.io/Ghash.io came along, 0% pool fee, splits everything easily, bam, sold.

Not to mention when people ask me why I use it, I tell them that and... then they start using it for the same reason. Obviously a feature a lot of people overlooked, plus merged mining in IXC, DVC, NMC is also a damn good perk.

EDIT: Yes, I did copy/paste this from my post in the other thread. I would like to add in the fact, Ghash.io continually is updating their interface and services, something not seen much from pool owners these days, not of this speed anyway.

From a miner's perspective the main draws to ghash.io (if you own your own equip) are:

1) 0% pool fee (but orphans are not included)
2) merged mining
3) good user interface with alerts for individual miners, and the ability to track detailed stats
4) stability of payout - when the pool is larger like ghash.io, there is less variance in your daily payout due to bad luck of the pool

With the small margins on mining gear, even with the run up in BTC/USD, all of the above adds up, and every extra % helps.

I suspect miners would love to point their gear at other pools, but no other pool I have seen has everything else listed above.  It is an attractive combination.

NOTE TO POOL OPERATORS: you want to compete with ghash.io, the above is what you need.

Right ok, you won. Miners have the real power...

More like the City

And where do pool operators get all their profits from? Miners. Doh.

LOL Why are we talking about miners?
Pools operators have the real power, miners are only sending data.
What are you talking about?

So Wall St owns ghash.io is what you are saying?

[Tinfoilhat] And what a better way would there be to destroy Bitcoin, than by its own users? What a proof that decretilized and unregulated currencies can't work. [/Tinfoilhat]

Not that I believe that, but the irony if something malicious happens, that was only possible thanks to the endless greed of Bitcoiners (WOW, I make a Satoshi more a Week there!), would be priceless. Actually, there may even be a lessen to be learned here and better now Bitcoin gets a big hit from this than in a few years.

Not true miners obviously have incentive to destroy the bitcoin network.  This doesn't mean they are doing it intentionally.  What I have learned at this point is that if wall street wants to destroy bitcoin one of the ways is creating a slick, easy to use pool with great payouts and lots of incentives.   Miners will jump to them for easy "profit" and once the network gets 50%+ it's game over.  You think wall street would have a problem dumping billions of dollars they would never see again into destroying bitcoin?  They would do it without thinking and the billions lost creating a slick miner friendly ticking time bomb would be like you losing a dime in the couch cushions.

Except that miners have zero incentive to destroy the bitcoin network. Its like cutting off your own head.

This issue has been already pointed out during last year bitcoin conference.
That's what you get with proof of work and ASICwith an "high" entry barrier.
Core developers should seriously start to think about a way to mitigate 51%

cex.io is part of ghash.io
The ghashes people trade on cex.io are hashing for ghash.io

Don't confuse cex.io with ghash.io. These are two separate issues.

I personally use cex because it is easy to use and you can reinvest the BTC into more ghash easily. If you don't own a miner then it is useful. I use other pool though and when I have enough on cex I usually buy into GB. Cex is just very useful but yes expensive.

Do people actually make money at cex.io? If so, hard to argue against market forces. If not, what the heck are people doing???

I think the damage has been done. cex.io has a lot of money to expand their farm which comes from selling really overpriced hashrate and people still keeps throwing their btc at cex.io. Right now, we can only tell people to avoid it and educate people about the importance of keeping bitcoin decentralized. Even moving to btcguild is a good idea right now.

I have mentioned about how mining manufacturers can help in keeping bitcoin secure and decentralized in this thread https://bitcointalk.org/index.php?topic=399313.20
I hope manufacturers are aware of the situation we are in and get their effort to improve it.

Many are seeing bitcoin as a way of making money, profits etc and it is hard to move forward if things stay this way. Bitcoin is more than that and I hope more people realize this and put more interest in keeping bitcoin secure. Please visit this thread and give your support in the effort for bitcoin decentralization https://bitcointalksearch.org/topic/p2pool-advancement-of-decentralized-mining-vital-to-bitcoin-network-security-329860

I actually am not familiar with the different pools, I would find this information useful and might allocate some resources accordingly.

People are drawn to Ghash.IO primarily because it has a high hash rate which provides quick results (people like instant gratification). The website is slick with the automatically updating stats. It merge mines several coins (perceived value, even if some of those coins are not worth much). There is zero fee. It allows someone to automatically split up the mining proceeds by percentage, for example, for a group buy. There is also the gambling / trading aspect of cex.io which has its own lure. Additionally, and perhaps most hurtful of all is the marketing aspect that incentivises people to advertise for them.

I agree that it is a big threat, and there is no way to know for certain that cex/ghash do not have additional hashpower running on other "unknown" private pools. Knowing that they will hurt themselves if they dump too much into cex.io at once. It is also unknown just what the ratio of their own hash power to individual's personal hash power pointed at that pool is. The other threat is that there is no representative (that I have seen anyway) that interacts with the community. They do not seem to be publicly interested in cleaning up their name in many of the threads about their past with double spending, for example. Ask yourself for a moment - how do they make any money themselves? They charge no fees for trading, minimum fees for withdrawing, very minimal fees for their own hash rate rentals. There is something else going on there, and this puts them in a class by their own.

I do not agree that something "needs to be done" about BTC Guild. The pool admin seems a very standup guy who is himself interested in the health of the community. I think that if it ever did come down to short term personal gain or the community, he would do the right thing for the community, and ultimately his own long-term personal gain as well. The vast majority of the hash power there is voluntary - meaning that people could pull their miners en masse and the pool could instantly be smaller. The pool has also not had the same bursting growth rate as ghash.io, and right now is also the biggest weapon the community has in fighting cex.io if it attempted to run a 51% attack. When bringing up new mining equipment, putting it on any pool other than those two is probably the best thing any of us can do individually, but it doesn't help that (from my testing) the most profitable pool is BTC Guild - in spite of its fees. If I'm in a group buy or trying to get a full return on a piece of hardware, it is silly to mine on a pool that I know will return a lower profit over enough time that I know variance isn't the cause.

Anyway - my 2 cents. I think what the rest of the pools need (other than the top 2) is very clear so I won't spell it out unless someone actually wants me to.

The big thing that drawn me to GHash was the cloudmining. Used around .1 BTC and got 2GH/s that constantly mines around .00001300 BTC every block.

Yes.
It's a free market, so large stakeholders have total freedom to protect their savings by investing in other pools.

I don't mine myself so am no expert but isn't it just a case of competing pools actually ... competing ? e.g. by improving services, or reducing fees? Must be a reason people use these two massive services? Compete with them

Get the attention of large BTC stakeholders and ask them to sponsor improvements or subsidies for competing pools (especially p2pool).

Yeah, 60% is a lot. Could do with having a dozen "big" players. Unfortunately its a free market, so what to do?

Around 60%, based on last 4 days of blocks. Also big "unknown" slice makes this scarier.
https://blockchain.info/pools?timespan=4days

OK gotcha. What % of the market do they have between them?

agreed network health is awful

GHash.io and BTC Guild pool operators.

I don't understand - how do you destroy bitcoin by coercing two people?!?

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.