Fork now and fork hard
Dear Foundation Members and Core Devs,
As you are aware, GHash.io has/had 51% of the hashrate. You know this is bad, so I won’t explain it. For reference, the following is the foundation’s blog post on the issue:
Bitcoin mining has been too centralized for years, with just a handful of pool operators have controlled well more than 50% of hashing power. Recently, mining power has become even more centralized, with one mining pool (GHash.IO) likely controlling somewhere between 40% and 60% of hashing power. That isn’t good, and if you are mining with GHash.IO I would strongly urge you to try one of the smaller pools, or, even better, take the time to run bitcoind and p2pool. But it isn’t disastrous, either. Even if GHash.IO is evil and intends to destroy Bitcoin they would be able to do only two things:
The first thing they could do would be to double-spend already confirmed transactions. For example, they could send some bitcoins to an exchange, trade them for dollars, wire the dollars to their bank account, and then announce a longer blockchain where the transfer to the exchange never happened. Now they have dollars and bitcoins.
There are some practical problems with carrying out that attack, though. They are likely to get caught, because it is impossible to wire money to a bank account anonymously. It seems very likely they would find themselves in legal trouble for defrauding the exchange.
The second thing they could do would be to prevent transactions or new blocks from other people getting accepted, effectively stopping all payments and shutting down the network. I wrote about neutralizing that attack a couple of years ago.
I think either attack is extremely unlikely from an economically rational mining pool– blockchain history would make it obvious that they were mis-using their power, and I’m certain either technical or social solutions would be found to punish the bad behavior. However, this is a good time to re-iterate my standard disclaimers: Bitcoin is still a work in progress, and you should only risk time or money on it that you can afford to lose. Mining centralization is one of several potential risks; read Jim Harper’s excellent Risk Management Study for a clear-headed assessment of risks and consequences.
This really isn’t a confidence-inspiring response. Bitcoin’s massive rise to stardom boils all the way down to one thing, and one thing alone: it removes trust from people and places it in mathematics and logic. The technologically astute have latched on and spread it to laymen across the world: “no one controls it”, “it’s completely decentralised”, “it’s moving parts are equations, not bankers”. The problem with the 51% business - whether an attack is carried out or not - is that the purity of the system, the provability of the system, is completely tainted.
Just like traditional fiat, Bitcoin is now reliant on people behaving in a certain way. We are now in the realm of “if"s, "should"s, and ”(un)likely"s instead of “read the source/paper”.
And so, like a great many people across various media at the moment, I am asking you to hard fork as soon as possible to disincentivise mining pools. How this is done is beyond my concern.
Furthermore, I wish to express my concerns at the Foundation’s comment that “Bitcoin is still a work in progress, and you should only risk time or money on it that you can afford to lose.” As a caveat, this is fair enough, but like it or not you preside over the mechanics of a $7bn USD economy that is actually changing the world for the better.
Whether the foundation/core team consider Bitcoin to be alpha, pre-alpha, beta, or anything else, the social value of what Bitcoin has become is kind of a moral trump card on your ability to hold your hands up and say “hey, it’s just an experiment!”
And you definitely don’t get to say that whilst simultaneously producing pages like this: https://bitcoin.org/en/bitcoin-for-businesses.
Finally, I’d like to ask you to consider the reputation damage if you don’t hard fork and this does all go badly wrong. My gran knows what Bitcoin is - there is so much exposure and potential that will get completely flushed down the pan when Bitcoin is dead and buried. If it dies now, mass understanding and adoption of cryptocurrencies will get pushed back years, and if the successor dies in a similar fashion, it could be game over for good.
I would suggest that if the Foundation is not able or willing to responsibly manage the Bitcoin economy and community, then it should perhaps not be the one to control the Github repo.
I beg of you - write the code and execute a hard fork.