Date Posted: 8/18/2015

The CoinTelegraph has covered Ittay Eyal's work on "the Bitcoin Miner's Dilemma", which is concerned with block withholding attacks, where an individual miner can cheat the Bitcoin mining pool he or she belongs to, contribute nothing, but still receive rewards. 

Previously, it had been believed that miners had no incentive to engage in this attack, due to the need to expand resources on it. Eyal argues that the system is currently faced with a version of the classical prisoner’s dilemma: it would be better for all Bitcoin mining pools to not attack each other, as no hashing power would get wasted on attacks in that case; but it is better for all individual mining pools to carry out the attack if they are the only one doing so. However, it is unsustainable to be attacked and not launch a counterattack – logically leading to all pools attacking each other. Eyal concludes that smaller and private mining pools would lead to be a better environment for Bitcoin as a whole.