What is Selfish Mining?
Mining is the process that mints new coins and validates transactions on a cryptocurrency blockchain network. Selfish mining is a strategy that maximises returns for only a section of the miners.
For their effort, miners get what’s known as a block reward. They split this among the nodes. Additionally, mining is a resource-intensive endeavour. The nodes invest heavily in terms of the mining infrastructure and energy.
Understanding Selfish Mining
Consequently, each miner has to think of a strategy that’ll bring them the best returns. And one of these strategies is selfish mining.
Cornell scholars Emin Gün Sirer and Ittay Eyal were the first persons to present the idea in 2013. They wrote a paper proving how some miners can earn more BTC than the rest. These miners seek, discover, and hide new transaction blocks from the main one. They only reveal them to their private pool of miners. In doing so, they create another fork.
Forked blockchains are initially private. They are also shorter than the public ones. The selfish miners calculate when to release the blocks to the public. Thus, other miners find a reason to ditch the public BC and join the new one.
As the private chain continues mining new blocks, it gets longer and longer. Just when it’s about to match the public blockchain’s size, the selfish miners reveal it. As this chain is more profitable than the public one, it’ll attract miners from the latter.
Selfish miners have an advantage over their peers in the public chain. First, their reward is higher. They also incur lesser energy costs.