Author: ZmnSCPxj 2017-11-08 05:37:39
Published on: 2017-11-08T05:37:39+00:00
A potential failure mode of Bitcoin mining was discussed in an email exchange on the bitcoin-dev mailing list. The concern raised was that a majority of miners, in the form of a cartel, could decide to validly orphan any blocks made by miners outside of their group. This would be possible since a majority of miners can decide which valid blocks extend the chain. They could soft fork a new rule where the block number is signed by a set of keys known only to the cartel, and that signature placed in the coinbase. Miners outside of the cartel would not be able to extend the chain. At below the 50% threshold, miners outside the cartel will on average outrace miners inside the cartel, so fullnodes which do not follow cartel rules will reject them as per Nakamoto Consensus. At some point, the chain split becomes permanent, with miners outside the cartel pulling above the cartel miners. However, above the 50% threshold, miners outside the cartel will be unable to keep up with the cartel and be unable to build on top of the cartel chain (as presumably they are not valid signatories). It is important to note that what matters is what fullnodes accept. If fullnodes do not care, then the group of miners that is larger wins. If fullnodes do check one or the other set of rules, then that set of rules will win. Given current politics, it is likely that fullnodes will institute an anti-cartel rule in this case, and reject the cartel and suffer low hashrate. Eventually, the cartel will be betrayed by one of its members mining the anti-cartel chain in return for fees and valuable block rewards.In conclusion, while it may not be feasible for one actor to gain a majority of hash alone, collusion makes it possible. It is crucial that countermeasures be put in place to ensure that mining remains permissionless. Fullnodes must be aware of the rules and reject any attempt to centralize mining by force.
Updated on: 2023-06-12T22:05:34.794519+00:00