Featured Research

from universities, journals, and other organizations

Bitcoin open to takeover, researchers discover with new algorithm

Date:
November 4, 2013
Source:
Cornell University
Summary:
A major flaw that has gone unrealized until now leaves the $1.5 billion Bitcoin market open to manipulation and a potential takeover, according to a new study by computer scientists.

A major flaw that has gone unrealized until now leaves the $1.5 billion Bitcoin market open to manipulation and a potential takeover, according to a new study by two Cornell University computer scientists.

Related Articles


Bitcoin is a peer-to-peer online currency that is rapidly gaining mainstream acceptance. Instead of exchanging physical coins, users of Bitcoin use the Internet to record money transactions in a global ledger. This ledger is maintained by a peer-to-peer network of computers called miners, who are compensated with Bitcoins for their efforts. Conventional wisdom asserts that Bitcoin is secure against colluding minority groups of miners.

But post-doctoral fellow Ittay Eyal and Prof. Emin Gün Sirer have discovered that the conventional wisdom is wrong. In a paper that was released on ArXiv today, they describe a mining strategy they call Selfish-Mine, which allows a group of colluding miners, known as a mining pool, to earn more than its fair share of compensation. Moreover, large mining pools can use this strategy to increase their revenue even more, at the expense of honest miners.

The implications of this result are devastating for the system, say Eyal and Sirer. Once a selfish mining pool forms, other miners will want to join that pool to increase their revenue. This process could lead to a takeover, where the selfish miners become a majority, control the global Bitcoin ledger, and the decentralized nature of the currency collapses.

Currently, any pool can employ Selfish-Mine and start a mudslide. Eyal and Sirer suggest a practical fix of the protocol that would prevent pools smaller than 1/4th of the system from employing Selfish-Mine. They warn, however, than pools this large do exist today (for benign reasons), and they should be dismantled for the system to be immune to selfish mining.

This result implies a new bound, requiring 3/4 of the miners to be honest. This bound is significantly higher than the wrongly-believed 1/2. The authors believe, though, that "the Bitcoin ecosystem is strong enough to maintain such a large majority of honest miners." The question is -- can the miners operating today adopt the suggested fix and dismantle too-large pools before a selfish mining pool arises?


Story Source:

The above story is based on materials provided by Cornell University. Note: Materials may be edited for content and length.


Journal Reference:

  1. Ittay Eyal and Emin Gun Sirer. Majority is not Enough: Bitcoin Mining is Vulnerable. Submitted to ArXiv, 2013 [link]

Cite This Page:

Cornell University. "Bitcoin open to takeover, researchers discover with new algorithm." ScienceDaily. ScienceDaily, 4 November 2013. <www.sciencedaily.com/releases/2013/11/131104112234.htm>.
Cornell University. (2013, November 4). Bitcoin open to takeover, researchers discover with new algorithm. ScienceDaily. Retrieved November 29, 2014 from www.sciencedaily.com/releases/2013/11/131104112234.htm
Cornell University. "Bitcoin open to takeover, researchers discover with new algorithm." ScienceDaily. www.sciencedaily.com/releases/2013/11/131104112234.htm (accessed November 29, 2014).

Share This


More From ScienceDaily



More Computers & Math News

Saturday, November 29, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Recharge Your Phone in 30 Seconds? Israeli Firm Says It Can

Recharge Your Phone in 30 Seconds? Israeli Firm Says It Can

Reuters - Innovations Video Online (Nov. 28, 2014) — With consumers demanding more and more from their mobile devices, scientists in Israel and Singapore are developing super fast-charging batteries to power them. Amy Pollock has more. Video provided by Reuters
Powered by NewsLook.com
EU Pushes Google For Worldwide Right To Be Forgotten

EU Pushes Google For Worldwide Right To Be Forgotten

Newsy (Nov. 27, 2014) — Privacy regulators recommend Google expand its requested removals to apply to all its web domains. Video provided by Newsy
Powered by NewsLook.com
Predictions Of Tablets' Demise Sound Familiar

Predictions Of Tablets' Demise Sound Familiar

Newsy (Nov. 26, 2014) — The tablet's days are numbered, at least according to a recent IDC report. The market-research firm paints a grim outlook for tablets. Video provided by Newsy
Powered by NewsLook.com
Today's Prostheses Are More Capable Than Ever

Today's Prostheses Are More Capable Than Ever

Newsy (Nov. 26, 2014) — Advances in prosthetics are making replacement body parts stronger and more lifelike than they’ve ever been. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Space & Time

Matter & Energy

Computers & Math

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins