Bitcoin is broken, wrote a Cornell University professor who developed an attack which lets people gradually take control of the digital currency system.
Prof Emin Surer developed a method for a theoretical attack which tries to take advantage of the way computers involved in Bitcoin share information.
To work, the "Selfish-Mine" theory assumes all participants in Bitcoin are honest, and emerges from the way people find and mine new coins.
Around every ten minutes, a group of computers dedicated to solving a complicated cryptographic puzzle does so, and is rewarded with Bitcoins – the difficulty of the puzzle ensuring there is no sudden influx of cash thus ensuring a certain stability to the currency.
When one Bitcoin is found the news is circulated and everyone works on the next puzzle, but Surer’s theoretical attack sees a large mining group not announcing when it has been given a new Bitcoin – thus gaining a headstart on solving the next puzzle, while others are working on one that has already been solved.
By this method the large group could eventually take control of the entire mining system, Surer suggests.
He wrote on his blog that "the problem is intrinsic to the entire way Bitcoin works", also saying that other cryptocurrencies operating the same way are just as flawed.
Currently Bitcoin software shares miners’ news with the entire community, and would need to change this fundamental rule to avert this situation.
He added: "Anyone can launch this attack successfully right now, and make revenues in excess of what they would otherwise make.
"It was previously believed that the Bitcoin ecosystem was safe as long as a majority were honest. Our analysis shows that this is wrong. If a selfish-mining pool were to command 1/3rd (33%) of mining power, it’ll always be in a position to make excess revenues over honest miners."
