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The collective value of the bitcoin mined in this pool was over $200 million in its first year. GHash.IO worked in conjunction with CEX.IO bitcoin exchange. Apart from mining bitcoin, GHash.IO hosted a Multipool for mining altcoins, as well as separate pools for mining Litecoin, Dogecoin, Auroracoin and Darkcoin. Altcoin mining options were available for independent miners, while bitcoin mining could also be done in the cloud by purchasing cloud-based mining power on CEX.IO Exchange.
Partnership with CEX.IO
Traders on CEX.IO could buy shares of Ghash.IO mining hardware to operate on the Ghash.IO mining pool. This is an innovative form of cloud mining which allows miners to enter and leave the bitcoin mining market quickly, without needing to purchase mining hardware. Although most traders take advantage of these cloud mining features of Ghash.IO, actual mining hardware could also be redeemed through CEX.IO. After GHash.IO closed in 2016, CEX.IO continued operating as a bitcoin exchange.
GHash.IO used PPLNS (“Pay per last N shares”), a reward scheme in which payment is given to shares within a 'window' of time, beginning with the last share submitted and increasing up to the last N number of shares. Shares submitted before this window are not paid. Shares are hashes, smaller than the target with a difficulty of 1 (usually pools use the same difficulty as the target for shares, but technically any difficulty could be used). Every hash created has a 1 in 232 possibility of being a valid share. In order to mine bitcoin in a more evenly-distributed and predictable way, miners often use pools; if this is the case, miners are awarded bitcoins according to the shares they submit.
On April 8, 2014, GHash.IO presented a new script-mining feature, GHash.IO Multipool, which enabled users to mine the most financially rewarding coins at any given moment and benefit from additional settings, such as the conversion and the switch settings. This new feature allowed users to mine new cryptocurrencies and convert them into bitcoins or Litecoins, as well as to set the miner to withdraw from the current job when switching coins. The Multipool-Pro functions on the basis of the proportional reward system — when a given block is mined, the reward is divided up among all workers proportionally according to the size of their share.
51% attack controversy
Due to the popularity of Ghash.IO's mining pool, many people in the bitcoin community were often worried about the possibility of a 51% attack. This kind of attack occurs when a single miner or mining pool is able to mine multiple bitcoin block rewards in a row. This would be a problem for the bitcoin network, because it hypothetically allows the mining pool to double-spend bitcoins. In July 2014, the GHash.IO mining pool exceeded the 51% threshold, which forced the bitcoin community to discuss the possibility of finding a common solution to this threat.
Since it is currently difficult to develop a long-term solution to this problem, the participants agreed to implement some temporary measures. Accordingly, GHash.IO released a voluntary statement, promising that it will not exceed 39.99% of the overall bitcoin hashrate. Moreover, GHash.IO representatives asked other mining pools to follow their example for the sake of the entire bitcoin community. It also stated that a new committee should be created to act as a watchdog against the 51% problem. This committee would include representatives of the mining pools, bitcoin businesses and other specialists in the field.
The 51% discussion received a broad coverage in the media, as well as other publications focused on cryptocurrency news. ArsTechnica, Bloomberg View, Vice Motherboard, International Business Times,
- Alex Wilhelm (16 July 2014). "Popular Bitcoin Mining Pool Promises To Restrict Its Compute Power To Prevent Feared '51%' Fiasco". Techcrunch.
- "Bitcoin pool GHash.io commits to 40% hashrate limit after its 51% breach". ArsTechnica. 2014-07-16. Retrieved 2014-10-14.
- Bershidsky Leonid (17 July 2014). "Trust Will Kill Bitcoin". Bloomberg View.
- Anthony Cuthbertson (17 July 2014). "Cryptocurrency News Round-Up: App Teaches Bitcoin to Children & GHash Commits to 40% Hashrate". International Business Times.