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Bitcoin 'mining pool' promises to stay small

Published on NewsOK Modified: July 16, 2014 at 5:38 pm •  Published: July 16, 2014
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NEW YORK (AP) — The largest group of bitcoin miners, which maintains and processes transactions in the digital currency, is promising to avoid majority control of the currency as a temporary measure to maintain the payment system's credibility.

Mining pool GHash.IO, which is controlled by a British company, CEX.IO Ltd., said Tuesday that it would not amass more than 40 percent of the processing power of the bitcoin system. Earlier this summer, it briefly exceeded 50 percent.

Miners operate the computers that keep track of bitcoin transactions. As a reward, they receive newly minted coins. A miner that controls more than 50 percent of bitcoin processing could control the flow of transactions, freeze people out of the network and keep all future bitcoins for itself. However, that would undermine the usefulness and credibility of the system, potentially making bitcoins worthless.

Changes to the software have been proposed to avoid the problem of a "51 percent attack," but CEX.IO said it isn't "able to solve the problem in a long-term perspective, taking into account interests of existing mining pools, individual miners and bitcoin community."

The company is setting up a committee of major bitcoin market players to develop a technical solution for the problem.

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