When a single miner or a group of miner solves a hash and creates an entirely new block, it is known as selfish mining. In order to get ahead of the public blockchain, miners create a fork from this operation.
Bitcoin mining is deceptive because the selfish mining method discriminates against miners who do not join the group. When a fork is created, the selfish mining group gets to mine it and keep it off the public blockchain, which benefits them greatly. By keeping the coins in the wallet of the selfish mining group rather than on the public blockchain, this reduces the likelihood of them being double-spent.
When a group of miners solves a hash, creates a new block, and adds it to their own chain, they fork the chain. It’s possible to keep going until all of the forks are mined. Some users may think their coins have been lost because they are stuck in one chain, when in fact they are on a different chain that was created by someone else. This can cause confusion for those users.
Is Selfish Mining a Type of Mining?
The practise of “selfish mining,” also known as selfish mining, is used by a group of miners to simultaneously mine multiple blocks. Consequently, forks are created and mined by the selfish mining group. If you don’t join the selfish mining group, you can’t join any of the forks that other miners create.
In order to simultaneously mine multiple blocks, a group of miners employs the dishonest practise of “selfish mining.” The selfish mining group then uses these forks to their advantage by mining them. If you don’t join the selfish mining group, you can’t join any of the forks that other miners create.
The Blockchain and Selfish Mining
A public ledger, the blockchain keeps track of all transactions. Each bitcoin block contains transaction data, such as the amount and the time of the transaction. It is the responsibility of all Bitcoin users to keep the blockchain up to date. Because each block can only be added once to the chain, the network relies on cryptography to prevent tampering without the agreement of all network users.
For the blockchain, it ensures that each new block is added sequentially. Changes made to a block during this process will be rejected by other nodes on the network as an attack on the network. This is known as a 51 percent attack, which refers to having control over more than half of the network’s mining power.
What Is the Process of Selfish Mining?
As a group of miners work together, they are able to mine multiple blocks simultaneously. Forks are then mined by the selfish mining group as a result of this. If you don’t join the selfish mining group, you can’t join any of the forks that other miners create.
The result of this is that these miners will see their blocks rejected by other network members and will eventually stop receiving rewards for their work. There may be multiple groups of users who have rejected all blocks if selfish mining continues for an extended period of time. This could lead to confusion for users who believe their coins have been lost because they are stuck on one chain when they are actually on another chain that someone else has created.
Public blockchains are longer than branched ones, but this isn’t a big deal. Any new blocks that are generated by the private chain are kept hidden from the rest of the network. Until the private blockchain has a higher block height than the public blockchain, mining is carried on.
Therefore, selfish miners time the addition of their new blocks to the honest blockchain in such a way that the public blockchain joins the newly introduced chain. Selfish miners will then. Bitcoin incentives and transaction fees are paid to miners who approve new blocks on the public blockchain.
Sirer and Eyal analysed the wasteful expenditures in both chains of command. Because of their higher payouts after accounting for wasted resources, they believed that private blockchain miners had an advantage over public blockchain miners.
Selfish Mining Poses What Kind Of Hazards?
Selfish mining entails a number of dangers, among which are the following:
After an unsynchronized fork is created by an unselfish mining group, the blockchain is rendered useless.
Because so many people reject all blocks, it can lead to confusion for users who believe their coins have been lost because they are stuck on one chain, when in fact they are on another chain created by someone else.
A situation where no one can agree on which fork is correct could result from preventing other miners from mining on the same fork. There will be no way to tell if your coin has been spent or not because of this change.
The “difficulty” of a new block is adjusted so that it is mined at the same rate as all previous blocks when a new block is created. A selfish miner will never be able to create blocks faster than the other miners because of this.
Is Selfish Mining Dangerous??
Some users may think their coins have been lost due to a fork in the blockchain caused by a selfish mining group, but they are actually on another chain that was created by someone else.
Many users may mistakenly believe that their coins have been lost because they are stuck on a single chain, when in fact they are on another chain that was created by a different group of miners.
What Is the Purpose of a Selfish Miner?
When a miner in a mining pool exploits the fact that other miners are unable to mine on the same fork, a selfish mining attack is possible. Selfish miners have the ability to forge a new chain in place of the existing one.
Since the selfish miner isn’t required to actively maintain the alternate chain, any of their blocks can be accepted by other miners without affecting the chain’s overall stability. Enough of the network’s hashrate must be maintained for them to create blocks on their own chain faster than other miners can create blocks on the original blockchain. Having the ability to double spend their coins makes them more profitable than other miners.
Bitcoin’s decentralisation is not threatened by self-interested mining!
At this moment in time, the Bitcoin blockchain is the least decentralised it’s ever been! This is the most central it’s ever been! Mining pools with greater economies of scale have never before been seen in the blockchain. It is estimated that by the end of this year, over 80 pools will account for more than 1% of the total network hashrate (i.e., Bitmain).
At this moment in time, the Bitcoin blockchain is the least decentralised it’s ever been! Until now, it has never been more centralised than it is now! Mining pools with larger economies of scale have never before been seen on the blockchain. It is estimated that by the end of this year, over 80 pools will account for more than 1% of the total network hashrate (i.e., Bitmain).
Because the entire Bitcoin network is now one big pool, selfish mining attacks are no longer a danger. This means that there is no longer a need for a threat from solitary mining attacks because the entire Bitcoin network is now a single pool of mining power..