Popular Bitcoin Mining Pool Promises To Restrict Its Compute Power To Prevent Feared ‘51%’ Fiasco

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This morning GHash.IO, a popular bitcoin mining pool, announced in a statement that in the future it will “not exceed more than 39.99% of the overall Bitcoin hashrate.”

Earlier this year, GHash crested the 50% hashrate mark, sparking fears inside the bitcoin community regarding the so-called ‘51% problem.’ The issue isn’t too hard to understand: If any one entity supplies more than half of the computing power that is used to mine new bitcoin, it has the ability to misbehave. In short, if any mining entity has 51% control of the compute input that runs bitcoin, it could block transactions, double spend, and more.

Following GHash’s 51% moment, worry reverberated throughout the bitcoin community that some sort of rubicon had been crossed. GHash’s compute share declined in the aftermath, and currently rests at 31%.

GHash has promised to never launch a 51% attack. As CoinDesk reported previously, and the group confirmed in an email to TechCrunch, GHash held a roundtable with other bitcoin constituents in the wake of the scare. According to a GHash spokesperson, the 39.99% ceiling level was proposed at the roundtable, and was accepted by the pool’s management.

Its new commitment to not reach the 40% mark — provided it meets its promise — would keep GHash comfortably far from the 51% level. GHash, and its related exchange, CEX.IO, ask other mining pools to follow its example in their statement.

Merely committing to not cresting the 51% mark isn’t a long-term safeguard, however. To that end, GHash is “initiating a committee” to seek a more permanent fix. The new commission will set out to solve the 51% problem technologically. Some have advocated that bitcoin itself be ‘hard forked,’ though a less extreme might be found.

Critics of GHash have pointed out that meetings of mining groups to discuss decentralization aren’t new. GHash, in their view, is somewhat late to the idea.

Why would GHash be willing to limit its size, and spend its time to hopefully patch the flaws in bitcoin? Simply that if the threat of a 51% attack persists, it’s bad for all bitcoin participants. Who wants to invest into a currency and platform that has such an obvious and actionable security issue?

What’s next? GHash will release a “policy document” that will also detail how the committee will be financed in a few weeks. Provided that the mining pool can get enough buy-in from other bitcoin players, progress could occur.

When the committee is formed, and provided that it can in fact improve bitcoin’s foundations, we’ll bring you more.

Bitcoin is currently trading just over the $610 mark.

IMAGE BY Bryce Durbin