Bitcoin Mining giant Bitmain has mined 42% of all Bitcoin blocks this past week, steadily moving closer to controlling a majority 51% of th network hash rate.
Bitmain Moves Closer to 51%
ASIC manufacturer and cryptocurrency mining giant Bitmain — claimed 42% of the total blocks found on the Bitcoin network from the past week. BTC.com and AntPool, which are both owned by Bitmain, currently comprise 26.6% and 15.3% of the network hash rate, respectively.
Bitmain Technologies Ltd. — the Beijing based Bitcoin mining company reported astonishing profits in 2017, taking in between $3 and $4 billion.
Bitmain has a big leg up on its competitors by manufacturing and using its own products in the mining process. It manufactures application-specific integrated circuits (ASIC) miners that are able to mine Bitcoin at a faster rate than high-end graphics processing units (GPU).
It also operates mining pools, where miners can join their efforts and ultimately cut down on their mining costs — as well as offering cloud mining services that allow miners to remotely rent out mining power from its mining farms.
Bitmain also mines Bitcoin Cash (BCH) with its ASIC miners — as BTC and BCH run on the same algorithm. If Bitmain were to halt mining BCH and instead used 100% of its resources for mining BTC, it could theoretically reach around 45% of the total Bitcoin hash rate.
This is quite close to the majority 51% number. This would theoretically put Bitmain in position to perform a 51% attack on the Bitcoin network to censor transactions or perform double-spends.
The Sky Is Falling — But Probably Not
The number 51% makes many people in the cryptocurrency space quite nervous. It’s a number often associated with loss of decentralization and immutability. What would happen if Bitmain were to reach 51%, and what are the possible ways of keeping Bitmain out of a singular majority position?
It wouldn’t be the first time in Bitcoin’s history that 51% was achieved by one company, however. In 2014 — mining company Ghash crossed the 51% mining pool threshold, causing a big controversy in the community.
One solution that Ghash proposed was to ask miners to move their resources into different mining pools, taking the majority advantage away. It also urged any company in the same situation in the future do the same. It would be a slightly different situation, however, with Bitmain, as they are one large mining corporation and Ghash was a collective of many small miners.
Another unlikely solution would be to change the Bitcoin Proof-of-Work (PoW) algorithm. This is quite unlikely due to the security issues that could arise. A similar situation happened after cryptocurrency Monero hard-forked into a proof of work algorithm that left the community divided in regards to the true goals and vision for the project.
At the end of the day — it does not seem like there is much fear of Bitmain executing a 51% attack even if they cross the threshold, as the incentive to not attack the network exists for the mining giant. The greater fear would be the vulnerability to a hack from the outside or a rogue team member creating problems.
What are your thoughts on Bitmain being so near to 51% of the total Bitcoin network hashrate? Let us know your thoughts in the comments below!
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