NiceHash Invites Smaller Crypto Miners To Join Them For Hash Power That Could Defend The Community Against A 51% Attack
Last month, a Reddit user pointed out an interesting fact – DASH’s hash rate is over 70% powered by NiceHash. Though that number has decreased to less than 25%, the post stated, “Let me proof this first. I stumbled over it when researching the ETC 51% attack and the discussions about other PoW coins and its ‘nicehash-ability’.”
Nicehash currently holds >70% of DASHs total hashrate, see:
https://www.nicehash.com/algorithm/x11 (1390TH/s nicehash vs. 1790TH/s total). This is the first problem, and it is uncommon. Usually nicehash holds around 10 – 20% of PoW coins nethash and it is only dangerous for smaller forks of the PoW coin.”
The DASH altcoin has a valuation of $500 mission after it forked off the Bitcoin blockchain in January 2014. The whole point of the altcoin is to make fast payments that are virtually untraceable, which is why many commenters were worried about the vulnerability that the token fasts. In the event that NiceHash turns ugly, it would be relatively easy with the previous power to cause double spending. Still, why would a company with a good reputation throw all of that away?
Realistically, there is nothing to indicate that NiceHash would be that underhanded, but the fact is that the ability to pull that kind of stunt is real. NiceHash has already denied the accusations that they are against a 51% attack, according to The Block. Elaborating, they stated, “Such deliberate and harmful actions should be taken very seriously.”
However, despite this stance, there is no attention given to the potential danger that they could cause. Instead, they invited smaller miners to join their work to prevent this type of attack and to prevent enough hash power from being accumulated by potential attackers.
In a statement, Nicehash stated, “NiceHash is giving everyone with smaller and less secure blockchain projects the option to make them more secure by leasing hash power. If you think your network is under attack (although such an attempt is extremely complicated and requires a very high level of skills and resources), you can mitigate such attacks and further secure the network by using NiceHash!”
“On Oct. 13, ethical hacker ‘Geocold’ followed through on his promise to 51 percent attack an altcoin. He eventually settled on Bitcoin Private (BTCP), and quickly gained majority hashrate control, but the spectacle was fraught with setbacks, including censorship from two streaming services that pulled the plug.”
Consumers can take some solace that there are safeguards already in place to prevent such an attack. However, NiceHash could take the initiative to change their software platform to stop hash power buyers from having the ability to dictate to miners’ computers, which prevents manipulation. The work to do so would be massive, and there’s little incentive for Nice Hash to take it on.