GHash.IO.

GHash.IO was the mining poolMining poolA group of miners who share the work of finding blocks and split the rewards, so each gets paid steadily instead of rarely. of CEX.IO, a cryptocurrency exchange founded by Oleksandr Lutskevych and registered in London in November 2013. The pool said it launched in July 2013, and its first block, 250,205, was found on 4 August. Miners could connect their own machines to it, or buy mining power on CEX.IO that mined on GHash.IO for them, which is called cloud mining.

In January 2014, by its own count, about 45% of its power came from machines built on chips made by BitFury, a mining company, and the rest from independent miners. Each GHash.IO block’s first transaction paid the whole reward to one GHash.IO address, and the pool shared it among its miners afterwards, by how much recent work each had sent. These are payments to the pool’s miners, separate from the transactions confirmed inside the block. A block found by GHash.IO doesn’t mean the transactions in it went through CEX.IO.

An episode from the pool’s first months made people ask who controlled that power. In November 2013 a user on the BitcointalkBitcointalkThe Bitcoin forum Satoshi Nakamoto opened in November 2009. Much of Bitcoin’s early history, from the pizza offer to Satoshi’s last post, happened there. forum set out evidence that someone had cheated BetCoin Dice, a gambling site, that September. By that user’s account, whenever a bet lost, a payment of the same coins elsewhere was confirmed in its place, a double spendDouble spendAn attempt to spend the same bitcoin twice. Only one of the conflicting payments can ever confirm.; the winning bets had been confirmed only in GHash.IO’s blocks, and some of the winnings were later sent to GHash.IO’s address.

CEX.IO replied that it would “perform an internal investigation to find out who is responsible for this.” No outcome of that investigation has been found. The developer Gregory Maxwell later wrote that the thread showed GHash.IO had been “used to rip off Betcoin dice via double-spends”. Vitalik Buterin, a co-founder of Ethereum, thought GHash was “probably correct” to deny any deliberate action, since the attacks “seem to be the fault of a rogue employee”.

A pool with more than half of all mining power can build blocks faster than everyone else together, so it could reverse its own recent payments or keep chosen transactions out of blocks, which is called a 51% attack51% attackOne miner or pool controlling most of the hashrate. They could reverse their own recent payments, but not steal coins or change the rules.. In January 2014 GHash.IO said it had passed 40% and would stop taking new outside miners for a time. On 13 June, The Guardian reported, it had 51% for a few hours, until some of its miners, BitFury among them, moved their machines to other pools; measured over whole weeks, its share peaked just under 40%. Ittay Eyal and Emin Gün Sirer, computer scientists at Cornell University, wrote that day: “Bitcoin is no longer decentralized. GHash can control Bitcoin transactions.” Such a pool “cannot take away your Bitcoins”, they added, “but they can make certain addresses unspendable”.

Others thought the danger smaller. Gavin Andresen, then chief scientist of the Bitcoin Foundation, wrote the same day that GHash.IO’s size “isn’t good” but “isn’t disastrous, either”: any attack would be plain to see in the blockchainBlockchainBitcoin's shared record of every payment since 2009, stored in blocks that each link to the one before — which is what makes it a chain., and he thought one “extremely unlikely from an economically rational mining pool”. Buterin, though worried, called it “another, better, argument” that pools “are not individual miners, but rather pools from which miners can enter and leave at any time”, as some of GHash.IO’s miners just had. GHash.IO said: “We never have and never will participate in any 51% attack or double spend against Bitcoin.” After a meeting of pools and Bitcoin companies in London on 9 July, it promised on 16 July to stay below 39.99% of all mining, and to ask miners to take their machines elsewhere if it came close.

On 12 January 2015 CEX.IO suspended its cloud mining, saying that with the bitcoin price falling and mining getting harder, its costs exceeded what mining earned. The pool shrank quickly, and by October 2016 its website said it was a private pool taking no new miners. CEX.IO stopped all mining on GHash.IO at 12:00 GMT on 24 October 2016, without giving a reason; the pool’s last block, 435,686, was found that morning. CEX.IO still runs as an exchange. It now counts 583,000 bitcoin mined through the pool, and says the pool “came close to potentially controlling 51%” and stopped taking on new miners rather than grow further.