Mining pool growth startles Bitcoin community for fear of a 51% attack [UPDATED]

The Bitcoin community lived a few moments of panic this Thursday (9) with several warnings spread across the web telling miners to step off the mining pool Ghash.io, which was scarily growing.

Bitcoiners started fearing the possibility of a ’51 percent attack’, but the price of the digital currency didn’t suffer significantly during the last few hours. This type of attack is possible when a pool gets more than 50 percent of the mining power and is able to double spend its Bitcoins, posing a real risk to the stability of the market and to the coin’s value.

In the last 24 hours, Ghash.io took a slice bigger than 42 percent of the entire hashing rate pie, turning the group into the world’s biggest Bitcoin mining pool. Some observers wrote, at BitcoinTalk.org, that the pool had even reached 45 percent of the mining power.

In the meantime, several forums and websites immediately started posting requests addressed to the miners, asking them to leave the pool. Cryptocoinsnews.com, for instance, wrote the following message: “this is a warning to all Bitcoin Miners. We sincerely request that miners using Ghash.io leave the pool for other smaller pools to create a more decentralized Bitcoin hash distribution”.

Although the pool was still nine percent short to perform the attack, there was the possibility of a “partnership” between the people controlling Ghash.io and other group like the unknow pack of miners who controlls around 16 percent of the mining power.

Despite the moments of fear, the price wasn’t significantly affected. The exchange Mt. Gox registered a slight decrease of the value from $960 to a minimum of $885, which is already showing signs of recovery.

This mining pool, also used by all CEX.io cloud miners, became very popular in the second half of 2013. However, their hashing rate has gone down in the last few hours since several miners at Ghash.io noticed they were helping the pool get extremely close to half of the mining power and switched to smaller pools, distributing the hash rate.

UPDATE, 19:06, January 9

GHash.IO has released a statement assuring it’s working to prevent the “accumulation of 51 percent of all hashing power”. The document explains the significant raise in hashing power “due to the zero percent pool fee, merged mining of altcoins, excellent real-time data presentation as well as quality 24/7/365 support service”.

“Although the increase of hash-power in the pool is considered to be a good thing, reaching 51 percent of all hashing power is a serious threat to the Bitcoin community. GHash.IO will take all necessary precautions to prevent reaching 51 percent of all hashing power, in order to maintain stability of the Bitcoin network”, the statement adds. GHash.IO has set a plan in motion that includes:

1. Temporarily stop accepting new independent mining facilities.
2. Implement a feature, allowing CEX.IO users to mine Bitcoins from other pools.

However, the pool states that it will not implement a fee, as the administrators believe “the pool has to remain free”.

Finally, the statement adds that “GHash.IO does not have any intentions to execute a 51 percent attack, as it will do serious damage to the Bitcoin community, of which we are part of. On the contrary, our plans are to expand the Bitcoin community, as well as utilise the hashing power to develop a greater Bitcoin economic structure”.