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According to this graph, the biggest miner is so big that combined with two of the three runners-up they would have more than 50% of the hashing power.

Is that to be considered a threat to the bitcoin network?

  • They mantain market balance. – H_7 Mar 26 '12 at 23:15
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Those aren't miners, those are mining pools.

There is the risk of disruption (e.g., rejecting all transactions) if a miner (or cartel) has 50% + 1 of the hashing power. But the pools are dependent on individual miners using the pool. If a pool were found to be cooperating in such an attack, miners would go elsewhere and that pool's hashing strength would disappear quickly. Thus the 50% foothold would erode and be lost.

So there is a risk of temporary harm should your scenario play out. Whether or not that could be permanent harm depends how determined the attacker is at controlling 50% + 1. Doing so is not only not profitable, it would also require a tremendous outlay of money. Attempting to attack Bitcoin with 50% could be performed only at a tremendous financial loss.

Here are more details on what the attacker could do:

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As others have mentioned, those are mining pools, not miners.

Large mining pools provide the benefit of allowing small miners to earn more regular income, which encourages participation in bitcoin mining and strengthens the bitcoin network.

They are also a threat because they can be hijacked or DDOSed by a party wishing to do a >50% attack.

A temporary >50% attacking from a large pool being taken over by a hacker or DDOSed is a much smaller threat to bitcoin than a party acquiring more than 50% of the network hash-rate through their own hardware and being able to conduct a permanent/long-term >50% attack, so mining pools, by increasing the contribution of honest miners to the network hashing rate, benefit bitcoin more than they threaten it.

Features could theoretically be incorporated into mining software to reduce the threat of hijacking and DDOS attacks too, like automatically switching a mining machine to a different pool if the mining software detects previously confirmed blocks becoming unconfirmed or the mining pool becomes unavailable, respectively.

  • 1
    Very nice suggestion the automatic switch. – o0'. Mar 26 '12 at 7:32
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Anyone holding a large amount of computing power can be seen as a potential threat to the Bitcoin Network. However, those pools have been around for a long while and their owners have earned their reputation in the Bitcoin community, so they can be more trusted.

Moreover, as it is not just one pool but three, such collusion is less likely.

There already was an incident where a single pool was holding a majority of the computing power of the Bitcoin network due to another pool shutting down for awhile and nothing really happened. If something was happening, one could probably pick it up quite early on and probably a lot of miners using those pools would put their computing power elsewhere.

The mining pools are largely financially invested in Bitcoin, meaning that they might be less likely to harm the Bitcoin community. However, the same could not be said about alternative cryptocurrencies, as it was demonstrated by Eligius attack on Coiledcoin.

If, however, you'd have a major mining farm held by one person or corporation whose main source of income is not Bitcoin, then you can start worrying. Those, however, would not appear as a mining pool.

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