The mining industry is facing many challenges due to skyrocketing centralization. Selfish mining is one tactic to promote centralization in the cryptocurrency mining industry. Selfish mining refers to a tactic for the business of mining digital coins. Selfish mining is an assembly of individual machinates to increase overall profitability over an electronic ledger.
Mining is a pretty usual term, and almost everyone has heard of it. However, the definition of mining relies upon the consensus mechanism a cryptocurrency is built. Does bitcoin trading excite you as well? Different consensus mechanisms distinctly host the mining process. In other words, Selfish mining is the action of hiding blocks from the original blockchain and making them visible after the electronic ledger proceeds forward.
- As discussed above, Selfish mining refers to a mining tactic in which an assembly of individuals performs delicate tasks to cherish the profitability of this business.
- Many cartels of miners promote selfish mining and usually try to hide the freshly created blockchain from the actual blockchain.
- Already mining industry is confronting numerous challenges due to increasing centralization, and selfish mining is also promoting it.
- Developers have proposed a distinct consensus mechanism to limit selfish mining as it disrupts the actual attributes of cryptocurrencies.
Let’s Find Out What Selfish Mining Is!
The founder of Selfish mining is named Ittay Play. Both Elay and Cornell mentioned the selfish mining strategy on their official website. These two discovered the strategy to increase the profit of bitcoin mining, but it introduced centralization in the industry. Centralization seems like a negative term in the digital coins market as it was meant to be a decentralized system. The concept of a selfish mining strategy revolves around hiding freshly created blocks. Selfish mining also includes formulating a distinct hard fork to render information on the second path. The mining network of this coin is set up so that even if you buy membership of a mining pool, the overall productivity still relies on individual and solo miners on the electronic ledger.
Selfish Mining Introducing Centralization in Mining!
Hard fork generated by a cartel of miners to initiate selfish mining strategy will be nominal in size. The fork generated by these miners is usually private to successfully hide the freshly created blocks. However, the cartel can misguide honest miners operating on the actual blockchain and join the private one created by the cartel.
After this non-private chain starts to record information regarding new blocks and exchanges, since the blockchain is private, one cannot see the number of freshly created blocks, and this is what selfish mining is all about. With the private blockchain, the public blockchain also keeps recording the blocks. After some time, both private and public blockchain become of equivalent length. The time length of a private chain crosses the public chain. Then, it becomes public and reveals the number of blocks added.
The hotness of selfish mining is inclining day by day. Each day people are joining private mining pools to do so. As discussed earlier, the cartel of selfish mining isis always a part of the private blockchain. These members have been promoting the strategy for a few years. But selfish mining seems to be undermining the decentralization part of cryptocurrency mining. Circumventing decentralization not only declines this business’s overall credibility but is also significant in deciding the profit of solo miners.
Can a Different Consensus Mechanism Decrease the Profitability of Selfish Mining?
In solo mining, selfish mining is challenging as one has to be part of a cartel promoting such strategies. Experts have suggested a dedicated consensus mechanism that can restrict selfish mining. Undeniably every miner looks to increase the profit of their business by following such strategies. However, selfish mining is not very good for the system, and people should stop following it to sustain the decentralization attributes of this process.
The consensus mechanism plays a massive role in determining the profitability of a mining business in a cryptocurrency network. Without a thriving and energy-efficient consensus mechanism, the process becomes highly energy-intensive. Yes, a dedicated consensus mechanism can restrict selfish mining as a profound consensus mechanism will detect the time cartel decides to split the blockchain and make it private.