Excerpted from an analysis by Dan Goodin:

“For the first time in Bitcoin’s five-year history, a single entity has repeatedly provided more than half of the total computational power required to mine new digital coins, in some cases for sustained periods of time. It’s an event that, if it persists, signals the end of the crypto currency’s decentralized structure.

Researchers from Cornell University say that on multiple occasions, a single mining pool repeatedly contributed more than 51 percent of Bitcoin’s total cryptographic hashing output for spans as long as 12 hours. The contributor was GHash, which bills itself as the “#1 Crypto & Bitcoin Mining Pool.” During these periods, the GHash operators had unprecedented powers that circumvented the decentralization that is often held up as a salient advantage Bitcoin has over traditional currencies. So-called 51 percenters, for instance, have the ability to spend the same coins twice, reject competing miners’ transactions, or extort higher fees from people with large holdings. Even worse, a malicious player with a majority holding could wage a denial-of-service attack against the entire Bitcoin network.

Like tremblers before a major earthquake, most of GHash’s 51-percent spans were relatively short. Few people paid much attention, since shortly after a miner loses the majority position, it also loses its extraordinary control. Then, on June 12, GHash produced a majority of the power for 12 hours straight, a sustained status that enables precisely the type of doomsday scenario some researchers have warned was possible.

There’s no evidence the anonymous operators of GHash exercised any of those abilities. Still, the mere possibility undermines a core Bitcoin tenet that it be decentralized so it can’t be controlled by a single entity.

“A 51 percenter can control which Bitcoin transactions happen,” wrote Ittay Eyal, a post-doctorate researcher in Cornell’s Department of Computer Science, in an e-mail to Ars. “It becomes a monopoly. It can set arbitrarily high transaction fees, for example, or even extort someone to allow them to perform transactions. It could block or delay all transactions but its own. One of Bitcoin’s goals was to be a free system, independent of anyone’s control. With small pools, no one has this kind of control. With a 51 percenter, there is.”

GHash’s ascendency to a majority miner comes even as its operators pledged never to cross the 51-percent threshold. It also comes less than a year after GHash was accused of using its considerable hashing power to attack a gambling site. Emin Gün Sirer, a Cornell professor who works with Eyal, agreed there was no evidence GHash or its operators at CEX.io took advantage of the recent majority positions.”