Ethereum: Why can malicious miners not award themselves with any number of bitcoins?

Ethereum Limitations: Why Malicious Miners Cannot Award Themselves Bitcoins

Ethereum, one of the most popular blockchain platforms, has been mired in controversy over its design and implementation. One of the biggest concerns surrounding Ethereum is the fact that malicious miners cannot award themselves a significant amount of bitcoins. In this article, we will take a deep dive into why this is the case and explore what happens if a miner tries to exploit this limitation.

The Basics: What is a Miner?

A miner is a person or organization that uses powerful computers (called mining rigs) to validate transactions on the Ethereum network and create new blocks. The main goal of a miner is to solve complex mathematical puzzles, which requires significant computational power. When a miner solves these puzzles, they are rewarded with newly minted bitcoins as well as transaction fees from other users.

Why can’t malicious miners award themselves bitcoins?

Now, let’s address the question at hand: why can’t malicious miners award themselves bitcoins if they want to? The answer lies in the very design of the Ethereum network. Specifically, it has something to do with transactions and proof-of-work (PoW) consensus.

Transactions are verified by miners

On the Ethereum network, every transaction is verified by multiple miners before being added to the blockchain. This process requires a significant amount of computational power from these miners, which can be expensive to maintain. As a result, the cost of verifying transactions becomes prohibitively high for malicious actors.

Proof-of-work (PoW) consensus

The Ethereum network uses a proof-of-work (PoW) consensus algorithm to secure its blockchain. This means that nodes on the network compete to solve complex mathematical puzzles, which requires significant computational power. The first miner to solve these puzzles will be able to add a new block of transactions to the blockchain and broadcast it to the network.

Why self-compensation of miners won’t work

If a malicious miner were to attempt to claim bitcoins simply for solving the puzzle, several reasons would prevent this from happening:

• Cost: The computational power required to solve the puzzle is significant, making it extremely difficult for a single miner to afford.

• Network effect: With many miners competing to solve puzzles and add new blocks to the blockchain, the incentive to attempt self-compensation is low. It is unlikely that a single miner could overcome this collective effort.

• Energy requirements

  

  : The energy required to run powerful mining equipment is substantial, which can result in significant costs for both the miner and the network.

What happens if miners attempt self-adjudication?

If a miner could somehow afford the computational power needed to solve puzzles on their own, several things could happen:

• Block reward inflation: As more miners attempt self-adjudication mining, the block reward for solving puzzles would decrease, as fewer transactions would be verified.

• Increased energy consumption: Increased energy consumption of operating mining rigs would lead to higher electricity costs and potentially harm the environment.

• Network congestion: With more miners competing for computational power, network congestion could become a major problem, leading to slower transaction processing times.

Conclusion

In conclusion, malicious miners cannot claim bitcoins for themselves due to the very design of the Ethereum network’s proof-of-work (PoW) consensus algorithm and the cost associated with solving complex mathematical puzzles. While it may seem like an intriguing idea for a malicious actor to attempt mining on their own, it poses significant risks to both the miner and the network as a whole.