Skip to content

Research: Pioneer Bitcoin miners chose to preserve network instead of abusing power

According to a recent study published on June 6, 2022, by The Center for Genome Architecture, only 64 network participants mined Bitcoin (BTC) between its launch in 2009 and the moment it reached the same value as the United States Dollar ($1) in 2011, giving them immense power over the network’s future – which they chose not to abuse.

Indeed, in what proved to be an interesting sociological and behavioral overview (among other things), the study carried out by a group of authors from Texas higher education institutions revealed that these pioneer Bitcoin miners, or as the study calls them, ‘agents,’ mined most Bitcoin between January 3, 2009, and February 9, 2011.

As per the text:

“This was due to the rapid emergence of Pareto distributions in bitcoin income, producing such extensive resource centralization that almost all contemporary bitcoin addresses can be connected to these top agents by a chain of six transactions.”

Notably, some of these top ‘agents’ include the famous Satoshi Nakamoto, aka Agent #1 – the largest agent, the infamous ‘Dr. Evil’ aka knightmb aka Michael Mancil Brown aka Agent #19, who was federally convicted for attempting to ransom Mitt Romney’s tax returns, as well as ‘Dread Pirate Roberts’ aka Ross Ulbricht aka altoid aka Agent #67.

Ulbricht is also known as the founder of the Silk Road, a criminal marketplace on the dark web where users could make all sorts of illegal purchases using Bitcoin as payment. The Silk Road was active from January 2011 to October 2013.

A map of the Bitcoin blockchain in early 2011. Source: The Center for Genome Architecture. Authors: Alyssa Blackburn, Christoph Huber, Yossi Eliaz, Muhammad S. Shamim, David Weisz, Goutham Seshadri, Kevin Kim, Shengqi Hang, and Erez Lieberman Aiden.

With great power comes great responsibility

One of the most interesting conclusions delivered by the study was that these most powerful network participants, who controlled nearly all of the network’s computational resources in the observed period, had multiple chances to abuse their power but chose not to.

“A well-known vulnerability of the Bitcoin protocol is that, if any one agent has over 50% of the computational power of the bitcoin mining network, the agent can unilaterally enrich themselves by validating fraudulent transactions. This is called a 51% attack.”

The study has shown that these agents repeatedly declined to carry out the ‘51% attacks’, despite having sufficient computational resources and early centralization allowing them to do so:

“Attackers could routinely exploit bitcoin via a “51% attack”, making it possible for them to repeatedly spend the same bitcoins. Yet doing so would harm the community. Strikingly, we find that potential attackers always chose to cooperate instead,” the study authors said.

They concluded that:

“Although bitcoin was designed to rely on a decentralized, trustless network of anonymous agents, its early success rested instead on cooperation among a small group of altruistic founders.”

Bitcoin wasn’t worth anything at launch, but it reached parity with the U.S. dollar only 25 months later.

Precisely ten years after achieving the price parity, the flagship cryptocurrency was worth $46,257. At press time, Bitcoin is trading at $29,500, which is 6% down on the day and a 7.25% drop across the week, according to CoinMarketCap data.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Services

IMPORTANT NOTICE

Finbold is a news and information website. This Site may contain sponsored content, advertisements, and third-party materials, for which Finbold expressly disclaims any liability.

RISK WARNING: Cryptocurrencies are high-risk investments and you should not expect to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. (Click here to learn more about cryptocurrency risks.)

By accessing this Site, you acknowledge that you understand these risks and that Finbold bears no responsibility for any losses, damages, or consequences resulting from your use of the Site or reliance on its content. Click here to learn more.