Selfish Mining

During the Gold Rush, selfish mining wasn’t only okay...it was expected. With decentralized cryptocurrency mining (like Bitcoin), selfish mining is...not so cool.

The whole premise of Bitcoin is that it’s decentralized. Rather than some institution verifying transactions (an institution the public may or may not be able to trust) there is none. Rather, everything is encrypted and publicly posted. It’s hard to lie, cheat, or steal when it comes to Bitcoins, because everyone can see the public blockchain ledger.

Selfish mining threw a wrench into this system. It's when groups of Bitcoin miners work together to gain more Bitcoins (a type of centralization) via hiding newly generated blocks on from the public blockchain ledger.

There are Bitcoin miners who pool together their resources, but that’s not selfish mining. It’s when a group of miners chooses to not put their blocks on the public blockchain. Considering how Bitcoin mining is designed, this gives the advantage for mining future Bitcoins to the group hiding their blocks. By making their own closed-off system within the Bitcoin mining world, it’s kinda antithetical to the whole decentralized thing that Bitcoin is about.

This is a BFD, potentially. It’s not just some ideological tiff. It could be the end of Bitcoin as we know it. Since it’s only rational to partake in selfish mining (greater rewards), then the logic follows that, if everyone started doing this, Bitcoin won’t be decentralized anymore...it will be controlled by the groups’ managers. If a penalty were produced for people who are withholding their blocks from the blockchain, that could potentially help, but there’s no institution laying down the laws. Hmm.