Bitcoin 'mining pool' promises to stay small - 13 WTHR Indianapolis

Bitcoin 'mining pool' promises to stay small

Posted: Updated:
  • NationalMore>>

  • Police hunt for 2 who carjacked SUV, killed 3 kids

    Police hunt for 2 who carjacked SUV, killed 3 kids

    Saturday, July 26 2014 2:02 AM EDT2014-07-26 06:02:47 GMT
    Police are searching for two men who carjacked an SUV and plowed into a group of children and adults selling fruit at a Philadelphia street corner, killing three kids and seriously injuring two women.More >>
    Police were searching for two men who carjacked an SUV and plowed into a group of children and adults selling fruit to raise money for their church, killing three kids and critically injuring their mother and the...More >>
  • Ohio State under shadow again, this time with band

    Ohio State under shadow again, this time with band

    Saturday, July 26 2014 12:45 AM EDT2014-07-26 04:45:52 GMT
    The Ohio State marching band is moving forward without its director; a day after he was fired they're performing with the Columbus Symphony in what's often considered the band's unofficial season kickoff.More >>
    Having forced out a beloved football coach and watched its president retire after a series of verbal gaffes, Ohio State University again finds itself grabbing headlines with the firing of a celebrated marching band...More >>
  • Baby dies after being left in hot car in Kansas

    Baby dies after being left in hot car in Kansas

    Friday, July 25 2014 11:56 PM EDT2014-07-26 03:56:40 GMT
    Police have arrested the foster parent of a 10-month-old girl who died after being left inside a hot car in Wichita, Kansas.More >>
    A 10-month-old Kansas girl died after being strapped for more than two hours inside a sweltering car, and police arrested a foster parent who said he'd forgotten about her until something on TV jogged his memory, an...More >>
By PETER SVENSSON
AP Technology Writer

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.

Bitcoins allow people to send money over the Internet without going through banks. Transaction costs are low, but it also means the currency is useful for illegal activities such as money laundering and drug sales. Bitcoins have also become a target of speculators betting on the currency's continued run-up. Its value has grown a hundredfold in the last two years.

From a technical standpoint, bitcoins are sequences of numbers, painstakingly produced by computers churning through millions of calculations. Bitcoin transactions are recorded in a virtual public ledger, known as the blockchain. Miners are in charge of maintaining the blockchain.

One mining computer might take years to produce a single block of coins, and there's no way to know when that might happen. In pools, miners divide the bitcoins they create among themselves in proportion to the work done, providing with them with a steadier stream of income.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Powered by WorldNow