Can Two Bitcoin Blockchains Actually Co-Exist? – Trustnodes

Can Two Bitcoin Blockchains Actually Co-Exist?

0

The two biggest digital currencies, bitcoin and ethereum, have now both had a major chain-split that created a new minor currency.

With the dust settled, we can discern that while the two currencies shared some experiences in their chain-split, such as the minority coin being valued at around 10% in both cases, there is one significant difference which may mean that in bitcoin two bockchains can not co-exist without protocol level modifications.

The primary reason is the inbuilt algorithmic difficulty calculated to keep block times within a somewhat predictable and static average time-frame.

If more hardware is added to the network, for example, that difficulty increases, making finding blocks more difficult, and vice versa if hardware is deducted from the network.

But the speed of such difficulty change differs in bitcoin and ethereum. For bitcoin, it is every two weeks, for ethereum, it changes every block.

Few bitcoiners were aware of that difference in 2016, which is why almost no one thought eth would experience a chain-split because of that difficulty function.

However, now knowing that difficulty changes by block, we can say that in ethereum two chains can easily operate without needing any protocol level changes.

That’s shown by the fact ETC was up and running within hours, with the network stabilizing very quickly, then continuing to operate no differently whatever than eth as far as the usual functions are concerned.

For bitcoin, the story is very different. Instead of by block, difficulty changes every 2,000 blocks or so in BTC, which translates to around two weeks.

That makes the survival of the minority chain extremely difficult and probably impossible in practical terms if it does not undertake protocol level changes.

This is clearly shown by the experience of Bitcoin Cash (BCH/BCC). That currency would have most likely not survived if it had not implemented some protocol changes to the difficulty.

The change they implemented was to lower difficulty based not only the number of blocks found, but also if no blocks are found within a certain time-frame of around 12 hours.

However, although that may have worked to bootstrap the currency, it is clearly not working to allow the currency to function now that it is up and running.

Bitcoin Cash’s mining profitability.

That’s because this added difficulty adjustment has implemented a high level of volatility at a protocol level whereby miners stop their hardware for hours, wait for difficulty to drop, then turn it on again and mine 50 blocks or 100 blocks in one hours.

After two months of up and running, the currency is clearly failing to keep times within an average of 10 minutes. An objective and significant flaw which considerably differentiates it from BTC and the way the network used to function which undoubtedly was superior in the relevant aspects we are addressing.

They can change difficulty by block, which might allow them to have more predictable times, but that might actually not be the case because bitcoin changes difficulty every two weeks.

We may therefore see the same protocol level volatility as the two currencies would not be operating the same way as far as mining is concerned thus allowing for arbitrage of sorts.

Which might leave only a change of proof of work, but the fact one chain needs to make such fundamental protocol level changes may suggest that two bitcoin chains can’t quite co-exist as they may need to, in effect, replace all the hardware that provides network security, which by definition should lower the value of the chain that does require such changes.

Bitcoin, therefore, might have been designed, in a fundamental way, to not allow the co-existence of two blockchains unless one of them changes so considerably that it objectively has no reasonable chance of being the majority chain unless the circumstances are extraordinary.

 

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments