Selfish bitcoin mining is amongst the most criticized mining strategies that people use to increase their profits in the business. You can also visit bitcoin trader platform to get in-depth information about the mechanism of bitcoin trading. Miners heavily utilize other profitable mining strategies: botnet mining, USB mining, micro mining, and cloud mining.
Cloud mining has acquired extreme popularity in the past few years as it has the power to resolve the majority of challenges related to cryptocurrency mining. In Selfish bitcoin mining or selfish cryptocurrency mining, the individual tries to keep the information of freshly minted block a secret from every participant of that network. Here is all you need to know about the concept of selfish mining.
Key Takeaways!
Selfish mining is one of the most criticized mining strategies utilized by cryptocurrency mining to increase the probability of their incentives in the mining business. Selfish mining is not merely performed by solo miners but by a small group of miners. Moreover, many cryptocurrency mining pools were seen using this strategy to skyrocket the number of incentives they make after solving every block.
In selfish mining, usually, the cryptocurrency miners try to keep informed of the freshly minted blocks by them a secret from another participant of the network. So usually, all information of the freshly minted blocks shows up on the blockchain to every network member. So, for example, the bitcoin blockchain has information about all the blocks ever minted by bitcoin miners and even you can access that information.
A few cryptocurrency mining groups have successfully implicated this mining strategy to increase profits. However, the short probability of selfish mining does not mean it cannot happen in more extensive cryptocurrency networks. Selfish cryptocurrency mining can also result from the 51% attack on a digital network. Considering the centralization in the bitcoin and virtual currency mining industry, 51% is possible. Furthermore, the majority of the mining pools are also owned by only one parent company, making the mining industry more centralized.
How does selfish mining work?
You might know that cryptocurrency mining majorly targets two tasks in a digital currency network. The first is to validate and formulate new blocks, and the second is to keep the supply of tokens ongoing. Cryptocurrency networks are transparent because they store information about every block on the blockchain.
But in the case of selfish mining, miners do not prefer to keep the record of blocks they mined on the blockchain. The founder of selfish mining, Emin and Eyal, discovered this mining strategy in 2013. Both Emin and Eyal stunned everyone by stating that a miner can earn more digital currencies by not keeping the information of freshly minted blocks in a public manner.
As per a few reports, selfish mining has not come into live action, but a few rich sources have depicted that some cryptocurrency mining groups were seen using this mining strategy last year. Undeniably, no miner has used this mining strategy on major cryptocurrency networks, but nobody knows about it as it is a complete secret even if they have used it.
What do you mean by selfish mining attack?
As discussed above, selfish mining can result from a 51% attack. 51% attack is a difficult moment in any cryptocurrency network. Once a group of miners own the 51% hash rate of a cryptocurrency network, they can easily change the information present in that blockchain. In a selfish mining attack, miners can change the database present inside a blockchain to embrace the block rewards for a particular group of miners.
How can selfish mining disturb the mining industry?
Mining is not just a way to get incentivized with virtual currency, as digital currency incurs the significant importance of mining in terms of validating transactions. So if they try to keep information of every block they mint a secret, the blockchain will not have information of every transaction, which can further lead to double-spending.
If Double spending occurs in a cryptocurrency network, the spot value of that digital currency can crash in bare minutes. So, yes, selfish mining is a massive threat to cryptocurrency and the mining industry.
