Researchers have scuttled Bitcoin mining mammoths such as GHash with a proposed system alteration that would end the money-making collectives and return fairness and stability to the crypto currency.
Cornell University academics (@IttalyEyal) Ittaly Eyal and Emin Gün Sirer (@el33th4xor) say their "Two Phase Proof of Work (2P-PoW)" is a simple solution to de-incentivise large Bitcoin mining pools.
The problem the pair hope to address is the fact that big mining pools can cheat the system with selfish mining. The duo point out that pools with more than 25 percent of the total network could earn more than their fair share, more so for those with 33 percent. Even larger pools could 'double-spend' with low confirmations, while those with over 50 percent control, as in the case of GHash, were an "unmitigated disaster", they said.
The 2P-PoW scheme aims to make collective mining less attractive by making proofs of work delegation harder without erasing a miners' fortunes or negating their hardware investments.
The 2P-PoW platform was developed after the GHash behemoth collective was found to dominate Bitcoin mining by scooping about 51 percent of all coins uncovered to date. The feat was a breach of etiquette -- the pair dubbed it "armageddon" -- as it undermined the key decentralised feature of Bitcoin.
GHash apologised and promised never to repeat the "51 per cent attack", but not before the website was hit with distributed denial of service attacks.
Eyal and Sirer said their platform would help miners by slowing hardware obsolescence which they peg at an astonishing 99.3 per cent loss of value within 28 weeks, leading to a huge turnover of equipment.
The two phase PoW introduced a second crypto-puzzle alongside the unmodified current quiz. Miners would continue the usual routine to solve the current puzzle but would then need to sign the block with the private key that controlled the payment address.
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