Majority Attack – Is Bitcoin Still Uncensored With All These Mining Pools?

Yes, to some extent. It is too bad that mining pools are so large and rather concentrated. Work is underway to try to mitigate that.

Some points limit the threat though:

  1. The amount of damage miners can do is limited. They cannot directly steal money, or make more money out of thin air. The damage would be within the limits of double spending (solution: wait for more confirmations) or censorship of transactions (which the miner has no incentive to do unless too much is paid by someone else or required by law).

  2. Individual miners can switch (they have had them in the past) to other pools if the pool operator goes rogue.

  3. Pool operators will dig their own graves if they do evil things: Bitcoin will drop in price, costing them a lot of money and losing investment.

  4. As a final solution, when things get really ugly, Bitcoin can change the proof of working algorithm, rendering all mining equipment obsolete. Miners are mainly employed by the Bitcoin network to do some work, if they perform poorly they can be fired.

So, despite it being far from ideal, there are still incentives to keep miners honest and rules limiting their insecurities.

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