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.

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 October 21, 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 October 21, 2014).

Share This



More Computers & Math News

Tuesday, October 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Japanese Scientists Unveil Floating 3D Projection

Japanese Scientists Unveil Floating 3D Projection

Reuters - Innovations Video Online (Oct. 20, 2014) — Scientists in Tokyo have demonstrated what they say is the world's first 3D projection that floats in mid air. A laser that fires a pulse up to a thousand times a second superheats molecules in the air, creating a spark which can be guided to certain points in the air to shape what the human eye perceives as an image. Matthew Stock reports. Video provided by Reuters
Powered by NewsLook.com
Apple Enters Mobile Payment Business

Apple Enters Mobile Payment Business

AP (Oct. 20, 2014) — Apple is making a strategic bet with the launch of Apple Pay, the mobile pay service aimed at turning your iPhone into your wallet. (Oct. 20) Video provided by AP
Powered by NewsLook.com
Google To Protect Against Piracy ... At A Cost

Google To Protect Against Piracy ... At A Cost

Newsy (Oct. 20, 2014) — Google is changing its search-engine results to protect content producers from piracy — for a price. Video provided by Newsy
Powered by NewsLook.com
What We Know About Microsoft's Rumored Smartwatch

What We Know About Microsoft's Rumored Smartwatch

Newsy (Oct. 20, 2014) — Microsoft will reportedly release a smartwatch that works across different mobile platforms, has a two-day battery life and tracks heart rate. 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