Bitcoin Mining Centralization Is ‘Quite Alarming’, But A Solution Is In The Works

Story by: Kyle Torpey

The Bitcoin mining process is what truly separates the peer-to-peer digital cash system from other forms of online payment. Instead of having a centralized third party who processes transactions, Bitcoin uses a number of dynamic, potentially-anonymous entities to move money around the network.

It is this removal of a trusted third party that allows Bitcoin to operate in a permissionless, uncontrollable, and censorship-resistant manner. All of Bitcoin’s differentiating use cases are built on top of this base feature.

While the use of proof-of-work (PoW) to solve the double spending problem was Satoshi Nakamoto’s key breakthrough with Bitcoin, it is also often viewed as one of the weakest points of the system in terms of how it can be attacked.

Someone who controls 51% of the computing power pointed at the Bitcoin network is able to choose which transactions can be processed. Someone who controls the majority of the network hashrate can also reorganize the history of network transactions in a malicious attempt to spend the same money twice.

That said, gaining such a large percentage of the network hashrate would be no easy task, seeing as current estimates put the network hashrate at around 70 million terahashes per second.

Original story: https://tinyurl.com/y5wc8qhl

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