Selfish bitcoin mining is among the most criticized mining strategies that people use to increase their profits in business. You can also visit bitcoin trading platform for detailed information on the bitcoin trading mechanism. Miners make extensive use of other cost-effective mining strategies: botnet mining, USB mining, micro mining, and cloud mining.
Cloud mining has gained extreme popularity in recent years as it has the power to solve most of the challenges related to cryptocurrency mining. In selfish bitcoin mining or selfish cryptocurrency mining, the individual tries to keep the information of the newly minted block secret from all participants in that network. Here’s everything you need to know about the concept of selfish mining.
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Selfish mining is one of the most criticized mining strategies used by cryptocurrency mining to increase the likelihood of its incentives in the mining business. Selfish mining is not only done by miners alone, but by a small group of miners. In addition, many cryptocurrency mining pools have been seen using this strategy to trigger the number of incentives they make after solving each block.
In selfish mining, cryptocurrency miners typically try to stay informed of the blocks newly minted by them a secret from another network participant. Therefore, normally all the information from the newly minted blocks appears in the blockchain for all members of the network. So, for example, the bitcoin blockchain has information about all the blocks coined by bitcoin miners, and you can even access that information.
Some cryptocurrency mining groups have successfully involved this mining strategy to increase profits. However, the short probability of selfish mining does not mean that it cannot occur in more extensive cryptocurrency networks. Selfish cryptocurrency mining can also result from a 51% attack on a digital network. Given the centralization in the bitcoin and virtual currency mining industry, 51% is possible. In addition, most mining pools are also owned by a single parent company, which makes the mining industry more centralized.
How does selfish mining work?
You may know that cryptocurrency mining has two main tasks in a digital currency network. The first is to validate and formulate new blocks, and the second is to keep the token supply running. Cryptocurrency networks are transparent because they store information about each block in the blockchain.
But in the case of selfish mining, miners prefer not to keep track of the blocks they mined in the blockchain. The founder of selfish mining, Emin and Eyal, discovered this mining strategy in 2013. Both Emin and Eyal surprised everyone by stating that a miner can earn more digital coins by not keeping information from newly minted blocks publicly.
According to some reports, selfish mining has not taken real action, but some rich sources have shown 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 no one knows as it is a complete secret even though they have used it.
What do you mean by selfish mining attack?
As discussed above, selfish mining can result in a 51% attack. The 51% attack is a difficult time on any cryptocurrency network. Once a group of miners owns the hash rate of 51% 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 within a blockchain to accept block rewards for a particular group of miners.
How can selfish mining disrupt the mining industry?
Mining is not just a way to incentivize virtual currency, as digital currency incurs the important importance of mining in terms of validating transactions. Therefore, if they try to keep the information of each block they coin secret, the blockchain will not have information for each transaction, which can lead to even more double spending.
If double spending occurs on a cryptocurrency network, the spot value of that digital currency may fail within minutes. So yes, selfish mining is a massive threat to the cryptocurrency and mining industry.