What Is Selfish Mining?

Selfish mining is a deceitful cryptocurrency mining strategy in which one miner or a group solves a haꦉsh, opens a new block, and withholds it from the public blockchain. This ওaction creates a fork, which is then mined to get ahead of the public blockchain.

If the group's blockchain gets ahead of the honest blockchain, it can introduce its newest block to the network. The network is geared to recognize the most recent block, so the group's fork would overwrite the original blockchain. The miners could theoretically steal cryptocurrency from other users by altering the blockchain.

How Does Selfish Mining Work?

"Mining" is the process in which nodes in the blockchain's network validate and confirm transactions. Miners earn newly minted tokens in return for their computational effort. In a selfish mining scheme, a cartel obscures newly created blocks from the main chain, revealing them atꦏ a later point in time.

Selfish mining was first identified by Cornell researchers Emin Gün Sirer and Ittay Eyal in a 2013 paper. They proved that it was possible to earn more bitcoins by hiding newly generated blocks from the main blockchain, creating a blockchain fork. Theoretically, the miners could introduce it to the network at the right time and alter the blockchain.

Bitcoin and other cryptocurrency networks using the proof-of-work consensus mechanism rely on miners whose mining software discovers the solution to a cryptographic problem. When the hash is solved, a new block opens up on the 澳洲幸运5官方开奖结果体彩网:blockchain, and the miner(s) who solved it receive a transaction fee and a reward.

In their 2013 paper, Sirer and Eyal demonstrated that miners can increase their overall revenue share by hiding new blocks and making them available to systems within their private network. This practice speeds up the discovery process and irons out infrastructure problems related to mining, such as network latency and electricity costs.

Initially, the forked blockchain would be shorter than the public blockchain. The private chain mines new blocks within its pool and hides any newly generated blocks. The mining process is repeated untilꦉ the private blockchain reaches a block height greater than that of the public blockchain.

Selfish miners then strategically time the introduction of their new blocks to the honest blockchain such that the public blockchain joins the newly introduced chain. The public network mines the new blockchain, and the selfish miners receive the 澳洲幸运5官方开奖结果体彩网:cryptocurrency rewards a✱nd transaction fees for their newly accepted blocks.

Sirer and Eyal analyzed the resources wasted by both chains. They postulated that selfish miners possessed a competitive advantage over miners on the public blockchain because their rewards were comparatively greater after accounting for wasted resources.

Is Selfish Mining a Threat?

Sirer and Eyal presented compelling evidence for altering a blockchain by creating a fork and getting ahead of honest miners. They also state that rational miners, upon observing the group's profits, will join the group because they will be attracted to the increased rewards. However, other re✅searchers disagree on the incentives, practicality, and threats posed ൲by selfish miners and groups.

In 2017, Craig Wright demonstrated that selfish miners would not create more blocks—and thus earn more rewards—than they were already entitled to if they were honest miners.

In 2018, Jake Gober theorized that if selfish mining were more profitable than honest mining, many miners would be doing it. Jake demonstrated that while selfish mining is more profitable than honest mining, multiple selfish miners or groups on a network would create a race between the forks and reduce profitability.

Interestingly, Zhaojie Wang et al. observe in their research that as of the end of 2021, there were no known instances of a selfish mining attack in the real world.

The arguments for both sides suggest that while selfish mining attacks can happen, they may be purely academic. Another possibility is that a selfish mining attack has occurred in the past and hasn't been observed.

However, it's more likely that the majority of cryptocurrency miners have honest intentions, and more popular blockchains are secure because there are too many participants. The more network participants a blockchain has, the faster it processes information and the more secure it is. The Bitcoin network is simply too large and fast to take over, even for a coordinated group of attackers.

The Bottom Line

Selfish mining is an attempt by one or more miners to alter a blockchain. In theory, they create a fork of the chain and mine it until they get ahead of the main network, then insert it back into the network, hoping that their version is the one that is accepted.