The Bitcoin Network Just Confronted A Major Vulnerability -- And Came Out OK

Last week, Bitcoin reached a critical juncture in its tenure as a payments network.

A Bitcoin mining pool, GHash, captured the majority of the mining power in the Bitcoin network. That’s a threshold that could have been hugely damaging to Bitcon.

With more than half of mining power, GHash could theoretically carry out a number of fraudulent attacks that would destroy the integrity of the emerging payments system.

But Bitcoin appears no weaker since GHash crossed the 50%-mark. There was no sell-off and the dreaded “51% attack” did not, by all accounts, come to pass. And for reasons that aren’t entirely clear, Ghash dropped to about 30% of processing power earlier this week. This doesn’t mean Bitcoin isn’t still vulnerable to attacks from other fraudsters. But what’s becoming clear is that Bitcoin is increasingly the province of business-minded enterprises invested in Bitcoin’s longevity.

In a recent report from BI Intelligence we give a high level explanation of some of the biggest vulnerabilities within the Bitcoin network, including examining the double spend problem, how it can occur, and arguments for why Bitcoin will weather these issues.

Here are some of the key elements from the report:

In full, the report:

For full access to all BI Intelligence’s analysis and downloadable charts on the Payments Industry, sign up.

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