GHash.io issues statement about 51% situation

Over the weekend, bitcoin mega-pool GHash.io controlled more than half of the network’s hashing power. Given that bitcoin was designed to be decentralized, with no particular party having any significant authority over the network, this was a deeply troubling development. Even worse, the GHash situation was a clear demonstration that bitcoin was unambiguously vulnerable to a 51% attack, although just how serious such an attack would be is still open to debate.

Through it all, however, GHash and parent company CEX.io were strangely silent. Even as the price was tanking to the $550 range following the hash power grab, the only message from the company was that they would be issuing a statement soon.

That statement, published today, offered little in the way of new information. Much like the last time GHash approached the majority share of the hashrate, the company reiterated that it would never intentionally harm the bitcoin network, and would never participate in a 51% attack.

Our investment, participation and highly motivated staff confirm it is our intention to help protect and grow the broad acceptance of Bitcoin and categorically in no way harm or damage it. We never have and never will participate in any 51% attack or double spend against Bitcoin. Still, we are against temporary solutions, which could repel a 51% threat.

In the statement, GHash says that they are “essentially being punished for our success,” citing their innovations as a mining pool and their fee-free business model. Their pool has grown huge because it offers services other pools don’t, they claim. Although they’re fully aware of the concerns prompted by the hash rate majority, asking their users “not use our services or to use competing solutions is not conducive to fostering innovation.” In other words, GHash has no plans to change its services or systems.

That said, GHash is also aware that they’re quickly becoming the boogeyman of the bitcoin world. The pool has lost 20% of its hash rate since Saturday, and now has less than a third of the total hashing power of the network. Why this has happened isn’t clear, with the most likely situation being a loss of miners to less-threatening pools and the redirection of GHash’s own hardware to calm nerves and allow bitcoin’s price to recover.

As GHash points out in their statement, the current scenario isn’t good for bitcoin’s stability and mass adoption, and a “long term preventative solution to the threat of a 51% attack does have to be found.” The company plans to meet with the leading mining pools and the Bitcoin Foundation in a round table discussion, perhaps coinciding with the upcoming CoinSummit Conference in London.