Miners Boycot Ghash.io as the pool approaches 51% of network hashrate

Ghash.io, a popular Bitcoin mining pool is approaching a hashrate of 51% on the bitcoin network. Several miners have started boycotting the pool, by switching their miners to less popular pools to distribute the hashrate throughout the network. They are doing this, because a 51% attack can have devastating effects on the Blockchain.

In the past 24 hours, Ghash.io has had a hashrate of 42% according to Blockchain.info. Users on Reddit are urging miners to switch pools, to prevent Ghash.io from reaching an even bigger share of the mining hashrate. Now you might think: isn’t that a bit drastic, as the mining pool is still 9% away from reaching 51%? Well, the problem is that there is an “Unknown” group of miners that has 16% of the network hashrate. If they team up with, or are Ghash.io in disguise, then they are already able to do double spends.

For those of you wondering what a 51% is, we will try to explain it as simple as possible. The work that miners do is to confirm transactions by solving deliberately difficult hashing puzzles. These confirmed transactions make up the block chain. The chain with the most work (computing power) done on it is considered the valid chain. This assume most computing power is held by honest nodes (miners). This is the bitcoin network’s security.

An over powered mining pool can possibly undermine this security. Its pool operators would be in a position where they could over power the honest miners and perpetrate double spending or otherwise screw with what should be valid transactions. In short: They can outperform the Blockchain, and make it longer (adding transactions), because they have a higher hashrate then everyone else.They can then confirm transactions that have never been performed. Because they have more then half of the hashrate, they are able to make their chain, the “main blockchain”.

Because Ghash.io is known to be a somewhat shady pool, people are starting to worry about the honesty of the pool. We therefore urge everyone to switch their mining gear to a different pool like 50btc, Btcguild, or any other pool.