What Is Selfish Mining and Why Is It Important?
Selfish mining refers to the strategy in which miners aim to profit by hiding the blocks they add to the blockchain from other miners. This strategy is discussed in detail in the article “Majority is not Enough: Bitcoin Mining is Vulnerable” published by Cornell University researchers in 2013. Selfish mining is a type of attack that threatens the security and fairness of the Bitcoin network.
How does selfish mining work?
Normally, when a miner finds a block, it immediately announces it to the network and receives the block reward. But a selfish miner keeps the block he finds private and adds it to his private chain. In this way, it aims to create a longer chain than the main chain on which other miners work. The selfish miner discloses his chain to the network when the difference between the main chain and his chain is two or more blocks. Thus, the last blocks in the main chain are considered invalid and the selfish miner gets all the rewards in these blocks.
What are the advantages of selfish mining?
The advantage of selfish mining is that the selfish miner gets more rewards from his own hash power. For example, if the hash rate of the selfish miner is 25%, he should normally receive a 25% reward. But by selfish mining, he can increase this rate to 33%. Thus, the selfish miner makes other honest miners waste their resources and can drive them away from the network.
What are the disadvantages of selfish mining?
The downside of selfish mining is that it weakens the security and fairness of the Bitcoin network. Selfish mining centralizes the network and leads to forks. This increases transaction confirmation times and increases transaction fees. Also, selfish mining can hurt Bitcoin's value as well. Because selfish mining goes against the decentralized and democratic nature of Bitcoin and can undermine users' trust.
What can be done to prevent selfish mining?
Various methods have been proposed to prevent selfish mining. Some of these are those:
- Requiring miners to immediately announce the blocks they find.
- Delaying or reducing block rewards.
- Enabling miners to share block headers.
- Randomly select or group miners.
Conclusion
Selfish mining is a serious type of attack against the Bitcoin network. Selfish miners aim to earn more rewards than other honest miners by hiding blocks. This compromises the security and fairness of the network. Various measures need to be taken to prevent selfish mining.