Bitmain Heading Towards 51% Control of the BTC Hashrate
The China-based crypto mining giant Bitmain has controlled 42 percent of computing power recently which gives rise to fears that the company is approaching the dreaded 51% threshold.
According to the data from CoinDance, the two mining pools owned by Bitmain, BTC.com and Antpool, have mined 25.7 and 16.1 percent of all bitcoin blocks over last week.
Although Bitmain still remains 9% short of achieving 51% control of the entire network, the bitcoin community still concerns that Bitmain may use its bitcoin cash hashing power that operates on the same PoW consensus algorithm to bridge the gap.
The worry here is, if any single company controls more than half of all the computational power, it has the power to manipulate the blockchain ledger on which transactions are recorded and perform a double-spend attack to spend the same digital coins more than once.
Recently, such attacks have been successfully deployed against a number of smaller altcoins, including Bitcoin Gold, Litecoin Cash, Verge and Monacoin. Some in the community worry that Bitmain might launch a malicious attack against the network due to its CEO Jihan Wu’s personal attitude towards bitcoin cash and the SegWit2x scaling proposal.
Cobra Bitcoin, co-owner of the famous site Bitcoin.org also accuses the mining pools of centralization on Twitter:
“Bitcoin can’t be frozen by any government, or Satoshi, or its developers. Bitcoin can only be frozen by BITMAIN, who have been allowed to control more than >50% of the hashrate. But if they do, don’t worry, we can quickly update a massive worldwide consensus-critical network.”
Nevertheless, it is less likely for Bitmain to launch a 51% attack. The company could technically control bitcoin, but excessive double spending could lead to a total collapse in the market confidence. Many people would exit their positions rapidly which may lead to a price diving of bitcoin and other cryptocurrencies. The company would lose its primary revenue streams as the price of BTC collapsed. A 51% attack would be tantamount to business suicide as it would lead to an irreparably damage for Bitmain in the long term, therefore Bitmain is unlikely to attack bitcoin network.