Bitcoin (Probably) Isn't Broken

Trailrunner7 writes "In the wake of the publication of a new academic paper that says there is a fundamental flaw in the Bitcoin protocol that could allow a small cartel of participants to become powerful enough that it could take over the mining process and gather a disproportionate amount of the value in the system, researchers are debating the potential value of the attack and whether it's actually practical in the real world. The paper, published this week by researchers at Cornell University, claims that Bitcoin is broken, but critics say there's a foundational flaw in the paper's assertions. ... The idea of a majority of Bitcoin miners joining together to dominate the system isn't new, but the Cornell researchers say that a smaller pool of one third of the miners could achieve the same result, and that once they have, there would be a snowball effect with other miners joining this cartel to increase their own piece of the pie. However, other researchers have taken issue with this analysis, saying that it wouldn't hold together in the real world. 'The most serious flaw, perhaps, is that, contrary to their claims, a coalition of ES-miners [selfish miners] would not be stable, because members of the coalition would have an incentive to cheat on their coalition partners, by using a strategy that I'll call fair-weather mining,' Ed Felten, a professor of computer science and public affairs at Princeton University and director of the Center for Information Technology Policy, wrote in an analysis of the paper."