Bitcoin was designed to be a currency free from the corrupting influence of government or any other centralized authority.Now, though, with the value of a single electronic unit hovering around $1,000, the battle to control emission of Bitcoins is on.The developers of Bitcoin created an ingenious system to regulate the currency's supply: Independent "miners" earn new currency by using their computers' processing power to perform the mathematical operations needed to make transactions in Bitcoin possible.The operations become more difficult as the amount of Bitcoins issued approaches a limit of 21 million.Initially, a home computer was all one required to become a Bitcoin miner.As the market grew, high-performance graphic cards became the tool of choice.Nowadays, most of the mining is done by dedicated devices called application-specific integrated circuits, and miners form pools that allow them to earn a regular, small profit instead of the occasional and improbable big payoff.One mining pool, known as GHash.io and run by an outfit called CEX.io, went a step further by selling something akin to shares in a high-tech operation with lots of specialized hardware.

Would-be miners simply pay for their piece of the computing power, then sit back and collect income.Last week, some independent miners noticed that GHash.io had grown so large that it controlled 45 percent of the Bitcoin network's processing power -- in other words, one organization was on the verge of dominating the emission of Bitcoins.litecoin most profitableCommentators on Bitcoin forums began to worry that if GHash.io gained a 51 percent share, it would be able to reverse transactions and make it possible to pay twice with the same Bitcoins.bitcoin disadvantagesSuch centralized power could render the currency useless.GHash.io quickly declaredthat it had no intention of executing a "51 percent attack."mine litecoin rig

It stopped accepting independent miners and said its users would be allowed to mine for other pools.By Monday, GHash.io's share of the network's processing power was downto 34 percent, according to the website Blockchain.info.bitcoin chaos computer clubBitcoin miners are no fools: Allowing one pool to dominate would devalue their holdings.bitcoin will soarThat said, a large farm controlling a lot of equipment, even if it is used to mine for different pools, could still quietly accumulate and abuse a majority without killing the entire market.CEX.io is a secretive company whose spokesman and chief information officer calls himself Jeffrey Smith.bitcoin what is xbtHis LinkedIn profile lists him as a graduate of the International Christian University in Kiev, Ukraine, and a Ukrainian resident.

Far from the center of the financial universe, Ukraine is a lawless place where world-class programmers often earn U.S.poverty level salaries and are therefore willing to take risks.Entrepreneurs in Hong Kong and China, among Bitcoin's biggest markets, are also building mining farms that could present a centralization threat.Theoretically, competition among such operations should make it difficult for any one to control Bitcoin emission, yet there is always a potential for collusion within an oligopoly, or a successful hacking attack on a few large organizations.So far, about 12.2 million Bitcoins have been mined.The more the currency grows, the stronger becomes the big farms' grip on emission.With billions of dollars at stake, the virtual currency no longer works in ways envisaged by its founders.They did not mean for it be a commodity for Chinese speculators, nor as a product to be turned out by industrial-sized specialized operations.Bitcoin is now less a currency than a kind of risky bond for which the issuers bear no responsibility.

Investors should be aware that the situation is ripe for abuse.(LeonidBershidsky is a Bloomberg View contributor.This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.NEW YORK Ukraine has partnered with global technology company the Bitfury Group to put a sweeping range of government data on a blockchain platform, the firm's chief executive officer told Reuters, in a project he described as probably the largest of its kind anywhere.Bitfury, a blockchain company with offices in the United States and overseas, will provide the services to Ukraine, CEO Valery Vavilov said in an interview on Wednesday.Ukraine's blockchain initiative underscores a growing trend among governments that have adopted the technology to increase efficiencies and improve transparency.REUTERS RECOMMENDSChina's Ant boosts bid for MoneyGramHacker documents show NSA tools for breaching global money transfer systemHow hackers made off with millions in BangladeshBlockchain is a ledger of transactions that first emerged as the software underpinning digital currency bitcoin.

It has become a key global technology in both the public and private sector given its ability to permanently record and keep track of assets or transactions across all industries.Ukraine and Bitfury are expected to sign a memorandum of understanding on Thursday, Vavilov said.Though Vavilov said he was unable to estimate the cost of the project, he said it was the biggest government blockchain deal ever so far.It involves putting all of the Ukraine government's electronic data onto the blockchain platform."Asecure government system built on the blockchain can secure billions of dollars in assets and make a significant social and economic impact globally by addressing the need for transparency and accountability," said Vavilov.There are other countries that have started blockchain programs, but they are smaller in scope involving one or two sectors, such as land titles and real estate ownership.Countries that have launched blockchain programs include Sweden, Estonia, and Georgia."Thisagreement will result in an entirely new ecosystem for state projects based on blockchain technology in Ukraine," Oleksandr Ryzhenko, head of the State Agency for eGovernance of Ukraine, said in an emailed response to Reuters questions."Our