Selfish Mining

What is Selfish Mining?

Selfish Mining is a mechanism where miners work together to increase their profits by creating different, separate forks and keeping the new blocks secret from the rest of the network. By doing this, selfish miners can increase their revenue. As a practice, miners are expected to announce a block as soon as it is mined. Once it is confirmed, they get block rewards. Therefore, miners can increase their revenue if they hold and release blocks according to their discretion. 

Selfish Mining affects the strength of the protocol as miner collusion can eventually lead to centralization, which is against the very concept of blockchain protocols. 

Against Blockchain Core Purpose 

Bitcoin mining depends on a range of different factors, like the efficiency of mining machines, electricity cost, and hash power added to the network. The concept is designed to guarantee decentralization. It incentivizes miners by giving rewards to miners on the blockchain. These rewards are why mining pools are popular, as miners can earn constant rewards.

Miners can enhance their mining incomes by selfish Mining. If they do not announce new blocks to the public network, the process is fast and uses fewer resources. As a result, the secretly mined blockchains will be smaller, but they can be used to divert other miners onto this chain by timing their announcement of the new blocks. 

By not announcing their new block right away, though, selfish miners end up developing their own branch of the blockchain. As a result, the rest of the network remains on the previous block, building it up, while the selfish miner builds on the new chain. This creates a fork in the blockchain. 

This diversion can continue until the new forked chain becomes longer than the original chain and is more profitable to mine. This continues until the forked, secret chain becomes more dominant than the original chain and becomes a threat to decentralization. 

In the long run, selfish Mining isn't viable long-term if allowed to continue, and the miners end up reducing their tokens' worth. The public's main interest in cryptocurrency is rooted in its decentralization and lack of manipulation. Selfish Mining ends up increasing centralization and impacts blockchains. Also, if selfish Mining becomes common, there will be little benefit for anyone on the blockchain.