Cobra Bitcoin, the anonymous yet influential Bitcoin personality, has Tweeted his suspicions that giant mining firm Bitmain controls more than 80% of Bitcoin mining hash rate through mining pools that it owns, which means the network has become dangerously centralized. A co-owner of popular websites bitcoin.org and bitcointalk.org, Cobra is calling for a change of the proof-of-work mining protocol to save Bitcoin.
Bitcoin simply can’t be censorship resistant long term if the hashing power is controlled almost entirely by one entity. You can’t build ‘digital gold’ on something that can be shut down by one man, and needs rapid massive coordinated response amongst *everyone* to counter. pic.twitter.com/nQaBV5VHY4
— Cøbra (@CobraBitcoin) June 19, 2018
Cobra says a significant portion of the mining power from BTC.com, ViaBTC, and AntPool is from Bitmain, in addition to other pools. He says there needs to be a hashing power audit of these three large pools to verify how much is independently owned, in order to confirm if a problem really exists.
Anyone who controls 51% of the Bitcoin mining network’s hash rate could theoretically launch a 51% double spend attack. In this sort of attack, someone who controls most of the mining power on a blockchain network can send cryptocurrency to one address on the original blockchain, and then send the cryptocurrency to another address on a new blockchain that they start mining. Using this method the attacker gets their money back. 51% attacks have been successful on several smaller cryptocurrencies that have low network hash rates.
Some observers have said that the claims Cobra is making are perhaps a bit overdone. First off, there is no proof that Bitmain has a majority of network hash rate, aside from their claims of producing the most cost-effective mining technology. Additionally, Bitmain is deeply invested in Bitcoin – a successful 51% attack on Bitcoin would cause Bitcoin’s price to plummet and ruin the company’s reputation. Bitmain has been profitable for years and is unlikely to jeopardize its position in the industry.
Not only does Cobra want to get rid of the proof-of-work protocol, the online figure wants to get rid of miners completely. He says miners “are the root cause of all of Bitcoin’s problems” and “are no longer useful to the community”.
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