What is Selfish Mining? How it Works and the Risks!

Selfish mining, a concept first introduced by Cornell researchers in 2013, reveals a mechanism in which miners collude to increase profits by manipulating fork blockchain.

In this article we will discuss in depth about selfish mining, its implications for health blockchain, and the underlying factors that drive this behavior.

What is Selfish Mining?

Selfish mining revolves around miners collaborating to exploit a blockchain fork, thereby maximizing their rewards while compromising the decentralization and integrity of the network.

By withholding newly mined blocks from the public network and creating separate forks, miners attempt to gain a competitive advantage and increase mining efficiency.

Factors that Drive Selfish Mining

Bitcoin Mining Efficiency

Selfish mining seeks to maximize profits by minimizing the time and resources spent mining blocks.

Electricity cost

High energy costs can be reduced by holding blocks and only mining at the most profitable times.

Hash Power Allocation

Miners with power hash larger ones have a higher chance of profiting from selfish mining.

Selfish Mining Mechanism

• Selfish miners secretly mine blocks on their private forks.
• When they find a block, they keep it secret from the public network.
• When they find another block on the public chain, they reveal their private block and connect it to the public chain.
• This creates a blockchain fork and the selfish miners get all the block rewards for their fork.

Implications for Decentralization

Selfish mining can lead to centralization of the blockchain network, as selfish miners with large hashing power can take control of the network. This can compromise network security and integrity.

Long Term Life and Risks

Selfish mining may not be a sustainable strategy in the long term. This is because:

• Other miners may start doing selfish mining, which will reduce profits for everyone.
• Blockchain networks can be changed to make it more difficult to conduct selfish mining.
• Selfish miners can lose the trust of the cryptocurrency community.

Conclusion

Selfish mining is a mining strategy that can be used to increase profits, but can also compromise the decentralization and integrity of the blockchain network.

Miners should carefully consider the risks and benefits of selfish mining before deciding to use this strategy.

Also read:

What is Ashdraked and its Impact on the Crypto Market

What is a Flash Loan Attack?

What is Pump and Dumb?

DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.