Ukrainian Network Nearly Took Control of Bitcoin Last Week

Written by:
Aaron Goldstein
Published on:
Jan/15/2014
Ukrainian Network Nearly Took Control of Bitcoin Last Week

As Bitcoin, the alternative anonymous digital currency, becomes more widely accepted within the online gambling community (Americas Cardroom became the first major poker network to implement the option last week), operators remain skeptical….and perhaps with good reason.

We are learning that last week, a bitcoin network out of the semi-unstable Ukraine nearly took control of the currency.

How is this possible?

Leonid Bershidsky of Bloomberg News explains:

Initially, a home computer was all one required to become a Bitcoin miner. As the market grew, high-performance graphic cards became the tool of choice. Nowadays, most of the mining is done by dedicated devices called application-specific integrated circuits, and miners form pools that allow them to earn a regular, small profit instead of the occasional and improbable big payoff.

One mining pool, known as GHash.io and run by an outfit called CEX.io, went a step further by selling something akin to shares in a high-tech operation with lots of specialized hardware. Would-be miners simply pay for their piece of the computing power, then sit back and collect income.

Last week, some independent miners noticed that GHash.io had grown so large that it controlled 45 percent of the Bitcoin network's processing power -- in other words, one organization was on the verge of dominating the emission of Bitcoins. 

A single electronic unit of bitten is currently hovering around a near record number of $1,000 but the currency has witnessed roller coaster ups and downs over the past year.  Most notably, its value dipped close to the $600 mark last month.

Americas Cardroom isn’t taking any chances.  They’ll be converting bitcoin to cash once in a players account in order to avoid any risk with the wild fluctuations.

- Aaron Goldstein, Gambling911.com

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