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When Binance lost $40 million to hackers this week, the crypto community discussed reorganizing the chain after it was suggested by a developer from MIT. Many people were upset by this proposition, declaring that there was no way a coordinated effort with miners could be pulled off. However, most bitcoiners don’t seem to remember that a similar centralized decision was made in 2013, when Btc Guild’s hashrate was leveraged to downgrade the main chain from Bitcoin 0.8 to version 0.7. Crypto Community Outraged Over Reorg Discussion
Cryptocurrency advocates have been all riled up discussing a theoretical reorganization of the Bitcoin Core ( BTC ) blockchain. The conversation heated up after it was suggested by the developer Jeremy Rubin and Binance CEO Changpeng Zhao (CZ), who mentioned it after his exchange lost $40 million worth of BTC . Some people became extremely upset at the mere discussion of a reorganization and stated that there was no way it was possible. People have argued the subject for hours and have written long-winded posts filled with theories and calculations. There are a couple of ways to trigger a blockchain reorganization , which occurs when the chain of recorded blocks is invalidated or orphaned by either a 51% attack or another method, forcing miners back to a point where they have to start again from a specific block height. It’s akin to rolling back a recorded history of transactions and then re-recording them again, but of course the new transactions would never be the same as the ones that were erased. If this technique was used, some believe the history of the Binance transaction which saw the loss of 7,000 BTC would be erased as well. The Coordinated Effort to Roll Back to Bitcoin Version 0.7 in 2013
After all the discussions on social media concerning centralized entities possibly reorganizing the chain to erase the loss $40 million, it’s interesting to revisit the history books to see if there were any similar events back in the day. In March 2013, Arvind Narayanan described a similar situation where developers coordinated to get a large mining pool to revert the chain to prior software after an accidental fork took place. There was a severe issue with the compatibility between Bitcoin client 0.7 and version 0.8, which caused the main chain to fork into two. In fact, Narayanan detailed that a centralized decision was utilized to help find a solution. After the crisis was assessed BTC , developers were introduced with an idea from Btc Guild which wrote: “I can single-handedly put 0.7 back to the majority hash power — I just need confirmation that that’s what should be done,” in a developer chat room. Pieter Wuille responded: “IMHO, that is what you should do, but we should have consensus first.” Narayanan’s paper underlined the centralization factor when he remarked: “So much for decentralization — The fact that Btc Guild can tip the scales here is crucial.”
“The hash power distribution at that time appears to be roughly 2/3 vs 1/3 in favor of the 0.8 branch, and Btc Guild controlled somewhere between 20% and 30% of total hash power,” the researcher noted at the time. “By switching, Btc Guild loses the work they’ve done on 0.8 since the fork started. On the other hand, they are more or less assured that the 0.7 branch will win and the fork will end, so at least their post-downgrade mining power won’t be wasted.”
Narayanan also stressed that if the hashrate was instead distributed among thousands of small independent miners, it would prove way more difficult to coordinate the effort. The paper describes how Btc Guild sacrificed their mining revenue for the good of the network. The author also hypothesized how developers would be able to convince another large pool operator if Btc guild didn’t believe it would win. After the plan was agreed upon by various developers, the alert notice was sent out which said: “URGENT: chain fork, stop mining on version 0.8.” In addition to the alert, Bitcoin Core developer Pieter Wuille told miners: “If you’re a miner, please do not mine on 0.8 code — Stop, or switch back to 0.7 — Btc Guild is switching to 0.7, so the old chain will get a majority hashrate soon.” After Narayanan summed up the events on how developers and Btc Guild fixed the situation, he explained his opinion that even though it was centralized it was the right decision. Vitalik Buterin: ‘Incident Brings Forth Uncomfortable Facts About Bitcoin’s Notion of Decentralization’
At the time, however, the inventor of Ethereum, Vitalik Buterin disagreed and said “the incident opens up serious questions about the nature of the Bitcoin protocol and puts into the spotlight some uncomfortable facts about Bitcoin’s notion of ‘decentralization.’” Buterin also emphasized that the other aspect of Bitcoin’s decentralization that this incident called into question was that of mining pools. “The reason why the controlled switch to the 0.7 fork was even possible was that over 70% of the Bitcoin network’s hash power was controlled by a small number of mining pools and ASIC miners, and so the miners could all be individually contacted and convinced to immediately downgrade.”
So the question is, how does the BTC hashrate distribution look today in comparison to when Btc Guild was a dominant miner back in 2013? Today a 51% coordinated effort would take around five mining pools to work together as each of the dominant BTC pools have 10% or more of the global hashrate. The task would be extraordinarily expensive compared to doing this maneuver in 2013. But so-called experts shouting that a coordinated 51% reorganization couldn’t happen today, especially after a similar instance took place in 2013, are being very naive. Even Buterin concluded in his synopsis of the 2013 situation that people were worried about centralization after it happened. In an op-ed on March 12, 2013, Buterin pondered: “Some worry, if a centralized core of the Bitcoin community is powerful enough to successfully undertake these emergency measures to set right the Bitcoin blockchain, what else is it powerful enough to do?”
What do you think about the similarities between the 2019 Binance discussion involving a reorganization and the March 2013 rollback? Let us know what you think about this subject in the comments section below. Image credits: Shutterstock, Blockchain.com, Pixabay, Arvind Narayanan blog Freedom to Tinker, and Twitter. Verify and track bitcoin cash transactions on our BCH Block Explorer , the best of its kind anywhere in the world. Also, keep up with your holdings, BCH , and other coins, on our market charts at Bitcoin.com Markets , another original and free service from Bitcoin.com. from Bitcoin News http://bit.ly/2HddeXb Bitcoin’s Software Has Been Rolled Back Before

#Blockchain Bitcoin’s Software Has Been Rolled Back Before

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On Monday, Coinmetrics.io published a study looking at hashrate history of the most competitive BTC mining pools. The research from the open source cryptocurrency analytics site reveals interesting insights into how the mining ecosystem has evolved over time. ‘Major Mining Pools Are Fallible’
Cryptocurrency mining is a very competitive industry that has grown significantly in recent years. The processing power of all the SHA-256 algorithm-based coins is more powerful than the world’s supercomputers combined, and individuals and businesses have sunk billions into the mining industry. On Jan. 7  Coinmetrics.io released some interesting research concerning the mining pools processing thousands of BTC blocks over the years. The research team at Coinmetrics explained that the analysis was in response to an Ark Invest issue published last year which lightly touched upon the mining industry and hashrate distribution. The authors state that the data used in the Coinmetrics report stems from well-known sources like BTC.com and Bitcoinity, but the team also parsed the coinbase outputs from the last 450,000 BTC blocks. These days, most mining pools use the coinbase parameter  to identify themselves when a block is mined on the blockchain. Coinmetrics explains the habit is completely voluntary and in the early days, miners did not identify themselves in this manner. Due to this factor, Coinmetrics skipped the first 100,000 blocks when parsing the chain. After sifting through the particulars, the researchers were able to identify 37 individual mining pools or large solo miners. The statistics suggest that these bitcoin miners mined at least 0.1% of the blocks in the period. “The striking conclusion from the all-time chart is just how fallible major mining pools are: several influential pools which once controlled significant fractions of Bitcoin’s hashrate – BTC Guild, Ghash, BTCC – are now totally defunct,” the report emphasizes. Coinmetrics continues by stating:    
Indeed, few pools seem to be truly persistent, F2pool and Slushpool being notable exceptions. Labeled chart of major mining pools. “37 individual mining pools / large solo miners which mined at least 0.1% of the blocks in the period, and 11 additional identifiable entities which we excluded due to not meeting that threshold (they were aggregated into ‘other known’),” the study details. The Rise of Unknown Miners in 2018 and a Shrinking Reward Distribution
One notable aspect from the report is that there’s been a significant rise of “unknown miners” or operators choosing not to identify themselves in 2018. There could be a variety of reasons why there’s been a spike of unknown miners, such as for privacy and political reasons. The Coinmetrics research also details that operations like F2pool have seen a significant drop in hashrate and Antpool’s slice of the pie has “moderately declined.” BTCC and BW.com have closed operations and Bitfury’s hashrate has dropped as well. Both F2pool and Antpool have dominated with roughly 83,000 blocks combined, but to this day BTC Guild still holds the most captured BTC by pool. This factor is due to the block rewards shrinking, as pools could amass a lot of coins if they had a sizable amount of hashrate back in the day. BTC Guild was able to accumulate the most BTC during its tenure mining due to the early block rewards being much larger. Most veteran bitcoiners will remember the old mining pool giants of the past mentioned in the Coinmetrics report. Back then there were plenty of BTC Guild memes and proponents begging individual miners to stop mining with the pool when it gathered 48 percent of the network’s hashrate five years ago. The same thing happened a year later with Ghash when the community was up in arms after the pool gathered more than 51% of the network multiple times in June 2014. Researchers Ittay Eyal and Emin Gün Sirer from the publication Hacking, Distributed explained the situation in great detail at the time and stated :
Actually, it became a 55% miner for almost a day. And prior to that, it seems to have tested the waters over a period of 10 days or so, perhaps gauging the public’s reaction. BTC Guild in 2013 . The mining pool caused a lot of debate at the time. One factor not mentioned in the Coinmetrics report is the hashrate variations that have stemmed from Bitcoin forks. A lot has changed in the last two years and since August 2017 there’s been some variance of miners switching between the BTC and BCH hashrate as well. The red lines represent deep variances between the BTC and BCH hashrate from Aug. 1, 2017, to December 2017 and then the 2018 BCH hard fork as well. This data stems from the analytics website Coin Dance. Because many mining pools like Antpool, Viabtc, F2pool, and BTC.com mine both chains, there was a notable divergence between the two chains’ mining profitability up until December 2017. Spectators also noted a slight deviation of pools switching hash during the BCH hashwars that started on Nov. 15 last year. The Coinmetrics analysis concludes by saying that there are a lot more stories in the data they scraped and they have “only begun to scratch the surface.”
What do you think about the recently published Coinmetrics report on mining pools? Let us know what you think about this subject in the comments section below. Image credits: Coinmetrics.io, Coin Dance, and Shutterstock. Have you seen our  widget service ? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool, and you can customize by size and color. The widgets include price-only, price and graph, price and news, and forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power. from Bitcoin News http://bit.ly/2Fgpfvb Major Mining Pools Have a ‘High Die-Off Rate’ Study Reveals

#Blockchain Major Mining Pools Have a ‘High Die-Off Rate’ Study Reveals

BTC Guild，这曾是历史最为悠久的比特币矿池之一。当时，该矿池就因用户和矿池本身收益下降的问题，考虑关闭矿池的运营，而出台后的纽约州BitLicense监管方案，也成了压死BTC Guild矿池业务的最后一根稻草。
在去年年底，来自四川的矿池服务商canoepool选择关停了比特币矿池，原因是控诉比特币已经被“一群无耻之徒操纵”，并随即启动接入了比特币现金的矿池服务。
而这一次，BTCC选择关停所有矿池服务器，这里包括下线刚刚启动不久的HSR（HC）矿池服务，相当于下线了整个矿池板块的服务，抽离业务的态度十分明确，选择了彻底、决绝的放弃！
为什么这么说呢？

BTCC宣布无限期关闭矿池业务的背后 隐藏着什么故事？

By Mark Norton (Bitcoin Warrior)
Mere weeks after New York state’s BitLicense requirements were said to be “in effect,” two Bitcoin mining pools have been forced to deny their services to New York IP addresses (one shutting down entirely), and one exchange has done the same. BTC Guild and Eobot are among Bitcoin’s smaller mining pools — you know, the kind that have kept Bitcoin mining sort of “decentralized.” But BTC Guild has now shut down entirely, telling its members:
“The fact that BTC Guild is not in New York does not matter, since it would be doing business with New York residents while they are physically in New York. This fact makes it possible for New York to attempt to claim jurisdiction to enforce regulations. Whether or not BTC Guild could win in defense of such an attempt is irrelevant, since the cost of defending the pool would be greater than any income the pool is expected to generate going forward.”
Similarly, Eobot explained to their members who use New York IP addresses that the mining pool could no longer afford to deal with them:
“The new BitLicense requirements in this state place compliance and cost burdens upon Eobot that we believe are excessive.”
Lastly, after declaring a block of New York IPs, the online exchange ShapeShift.io cited that BitLicense is actually dangerous to consumers , gathering their personal data into “honeypots” to be hacked. ShapeShift’s founder even started a website, PleaseProtectConsumers , which encourages companies to join him in refusing BitLicense compliance. Have Things Gone Terribly Wrong, or Precisely Right? Business licensing laws always hit the smaller guys first and hardest — but only if they’re “aboveboard.” This means using banks, government IDs, and business licenses — being “legally documented,” so to speak. While aboveboard businesses like Eobot
Originally appeared at: http://cointelegraph.com/news/114623/bitlicense-doing-its-job-eobot-becomes-3rd-firm-gone-from-new-york


BitLicense Doing Its Job: Eobot Becomes 3rd Firm Gone From New York (Op-Ed)

Bitcoin Mining Pool BTC Guild to Close Over BitLicense Concerns
Stan Higgins |Published on June 16, 2015 at 05:16 BST
News
BTC Guild is set to close at the end of June, months after previously announcing that it would shut down its long-running bitcoin mining pool. In its announcement, posted to Bitcoin Talk , owner Eleuthria cited the finalization of the BitLicense as a primary motivator for shutting down, stating that BTC Guild could not afford any legal threats that may arise as a result of the New York regulatory framework. The pool announced last October that it was considering closure in the face of falling revenue and rising risks for both users and the pool itself. BTC Guild first floated the idea in July 2014, citing the then-incomplete BitLicense at the time. Eleuthria noted that whether BTC Guild is based in New York "does not matter" and suggested that the pool could face significant legal liability regardless of its location because "the final regulations have enough gray area that BTC Guild is at risk". The post explained:
"This fact makes it possible for New York to attempt to claim jurisdiction to enforce regulations. Whether or not BTC Guild could win in defense of such an attempt is irrelevant, since the cost of defending the pool would be greater than any income the pool is expected to generate going forward. "
BTC Guild will cease operating after 30th June, with withdrawals available until 30th September. The mining pool – a collective of miners who share their hashing power to compete for blocks as a group – has reduced the minimum withdrawal amount to 0.001 BTC, with no transaction fees required to remove money from the platform. BitLicense, fraud risk blamed
In addition to the BitLicense finalization, the gradual decline in size of the pool relative to its costs and liabilities was cited as a factor in the closure decision. Eleuthria wrote:
"As mining has become more centralized, BTC Guild has continuously shrunk in proportion to the network, now being less than 3% of the network hash rate. The costs of running the pool have not changed, and the amount of funds at risk in the event of a compromise is significantly higher than what the pool could ever recover from. "
The announcement pointed to the growing risk of fraud BTC Guild allegedly faces, with Eleuthria stating that "I have been growing concerned for some time now about attempts to defraud pools. "
"When the pool was 20-30% of the network, the amount of funds at risk was slightly higher, but the ability for the pool to recover from that loss was present," Eleuthria wrote. "At 3% of the network, the pool would not be able to recover from such a loss. "
Sale cancelled
In its last announcement, BTC Guild floated the possibility of a sale in order to continue operating. According to the latest post, any idea of a sale was abandoned due to the perceived risk of fraud, as well as "personal attachment" to the pool on the part of its staff. "The risk of users being cheated or stolen from as a result of transferring pool ownership is not something I am willing to accept," Eleuthria wrote, reiterating that the decision to shut down is in part an effort to protect users from fraud. Eleuthria went on to thank the community for its support of BTC Guild, which began operating in 2011, writing:
"Thank you to all the users and the Bitcoin community for making BTC Guild a success for the last four years. It has been hard to finally make this call a second time with the determination to not reverse the decision. "
Closed shop sign image via Shutterstock


Bitcoin Mining Pool BTC Guild to Close Over BitLicense Concerns

BTC Guild is a mining pool which offers proportional (PPLNS) based rewards, where your reward is equal to the block value, multiplied by your valid shares submitted during the round.

Date	6/16/2015
Round	Dead
Amount
Investors	Dead
Valuation
Revenue	0 FY undefined
Sources	2

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