Bitcoin Cash is finally to update its difficulty algorithm, targeting an average confirmation time of ten minutes, through a hardfork expected to occur on or around November 13th, exactly two weeks from today.
“The original Bitcoin Cash “EDA” allowed Bitcoin Cash to survive as a minority chain but produces wild fluctuations of hashrate.
This is problematic because it prevents consistently fast confirmations for users, and radically shifts the coin issuance schedule,” the project said in a statement.
Therefore, they are to change it to a new algorithm proposed by Amaury Sechet, the lead developer of Bitcoin Cash. That was selected among three contenders, the other two being from Tom Harding and Neil Booth who manage different Bitcoin Cash clients.
The algorithms were tested by BitPrim, a bitcoin protocol development platform, and nChain, a new start-up. BitPrim found that:
“Tom and Amaury’s proposals are very similar in performance. Amaury’s proposal has better chances to get network consensus,” while nChain stated:
“[Amaury’s proposals] is the logical choice. [Tom’s proposal] is 3.1% (+/- 1.2% at 95% CI) better in most instances, but there are edge cases against it. For example a large miner can set fluctuations into the timing.”
Users very likely will welcome it too as it will hopefully return confirmation times to normal, although that remains to be seen considering the complex dynamics regarding the profitability between the two main bitcoin chains.
“This algorithm is based on a 144-period simple moving average. The difficulty is adjusted each block, based on the amount of work done and the elapsed time of the previous 144 blocks,” with 144 blocks being around one day.
The difficulty, therefore, will adjust much more mechanically and automatically than currently. At present, miners can simply shut off their hardware for some hours, then difficulty drops. After which miners start producing 100 blocks an hour or so.
With the adjusted algorithm, difficulty is adjusted every block, a bit like ethereum. With the determination whether to go up or down in each block based on the previous 24 hours.
It therefore responds far more quickly to events, which means stability at the protocol level should return, making bitcoin cash an actually viable currency.
That’s because of its added ability over bitcoin of zero confirmed transactions and because of far lower fees as the network has considerably more capacity.
Therefore, once difficulty is adjusted Bitcoin Cash might even become useful for every day commerce. That includes paying for coffees, or for wow factor demonstrations where you send some bits to show how the coin works in action.