Mining, in its most basic definition, refers to the system in which miners are rewarded with cryptocurrency as a result of adding new blocks to the blockchain. Selfish mining refers to a malicious strategy created by miners to increase their profits. Selfish miners hide the blocks they add to the blockchain and aim to extend this secret branch by forking.
Selfish mining refers to the strategy in which miners aim to make a profit by hiding the blocks they have contributed to the blockchain. Miners who perform the selfish mining process are called selfish miners. Selfish miners aim to be rewarded with more Bitcoin by causing honest miners to mine on the wrong blockchain.
How Selfish Mining Happens?
Selfish miners do not immediately publish the blocks they add to the blockchain and hold them. As a result, a bifurcation occurs in the blockchain. This bifurcation can mislead other miners, causing them to mine on the wrong blockchain. Miners who transact on the wrong blockchain are wasting their energy and resources.
It is in question that selfish miners gain unfairly as a result of honest miners transacting on the fake blockchain. Selfish miners aim to earn more Bitcoin through the efforts of other miners with the blockchain they hide. In selfish mining, as the energy costs to be spent while mining are reduced under normal conditions, there is a situation of profit in this sense.
Is Selfish Mining a Problem for Bitcoin?
Selfish mining carries the risk of centralization of mining. The centralization of mining is in stark contrast to Bitcoin's philosophy. However, it seems unrealistic to talk about selfish mining threatening Bitcoin. There are precautions that can be taken against selfish mining and there are some theories about this issue.
Frehness Preferred, proposed by Ethan Heilman in 2014, is one of these measures. The Freshness Preffered mechanism is a defense mechanism that punishes selfish miners. Hidden blocks created by selfish miners are blocked and selfish miners are penalized.
Another theory put forward by Jake Gober in 2018 revealed that selfish mining is not more profitable than honest mining. According to Gober's theory, if selfish mining were more profitable than honest mining, everyone would be mining selfishly, and the fact that everyone was mining selfishly would reduce profitability as it would create a race between selfish mining groups.