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Bitcoin could be hijacked by ‘selfish’ groups causing currency collapse

theguardian.com / By Samuel Gibbs / 5 November 2013 12.26 GMT

The bitcoin digital currency could be hijacked by “selfish miners” causing honest users to lose time, effort and money.

Due to the way the anonymous, decentralised, peer-to-peer digital currency is produced through complex computational processes, a rogue group of “selfish miners” could hijack the currency and overwrite the shared record of transactions. That would wipe out the bitcoins belonging to honest users and possibly cause a collapse in the currency, say two researchers from Cornell University.

The conditions for that to happen already exist. Ittay Eyal and Emin Gun Sirer, of the computing science department at Cornell University, New York, have worked out that the selfish mining group would need more than a 33% share of the computational power currently being used for generating bitcoins.

Certain groups regularly break 25% of the global collective bitcoin mining power, and some already exceed the 33% share, the duo say.

“The bitcoin ecosystem is open to manipulation, and potential takeover, by miners seeking to maximise their rewards,” Eyal and Gun Sirer say in a recently published paper on the Arxiv site. “The protocol will never be safe against attacks by a selfish mining pool that commands more than 33% of the total mining power of the network.”

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