Friday, December 5, 2014

The Miner's Dilemma

Closed pool.Mining pools are an essential part of the Bitcoin ecosystem. They enable many small miners to operate at reasonable business risk. However, they also pose a risk to the currency, as successful open pools have been able to grow dangerously big in the past.
Until now, there have been few forces to counteract this phenomenon. Gavin Andresen, chief scientist of the Bitcoin Foundation, has repeatedly urged miners to use smaller pools, and researchers, including ourselves, have suggested technical fixes to reduce pool size (hereand here). But alas, community pressure has only had limited success, and technical solutions are still under development and far from production.
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