The Bitcoin Cash hashrate (pictured) seems to be going through some considerable changes with an unknown miner, or potentially miners, standing not far off from controlling half of the network.
Just what exactly is going on here is obviously not easy to say, but the unknown hash is sometime signed as fezi and sometime as pretty much giberish.
In that halo3 style, Google shows a fairly interesting short old paper on some technique to split water when searching fezi3.
What that paper is saying exactly we have no clue, but this could be just a new miner or miners joining the BCH network.
That may in part be because currently it is about 1% more profitable to mine on BCH than bitcoin. So as you might expect, some hash may have moved from bitcoin.
It does however highlight the potentially very vulnerable state of BCH which is effectively merge mined with BTC.
Merge mining is known to be insecure because the smaller coin is just far too vulnerable.
The entire hash of BCH, for example, is just 3% of BTC. Now those are small numbers, but 3% is quite a lot of money and in practice translates to factories full of asics, so, it’s not a question of some kid playing around for the lulz.
Yet, and we’re sure he’ll forgive us, Luke-jr is not much of a grown up. If Blockstream has put him in charge of their new pool, he could potentially turn the hash on BCH for a bit.
Obviously with denial and so on, and for the lulz, but it could also be because Blockstream might perceive BCH as some sort of threat to their business.
That’s unlikely because of some of the reasons that Rusty Russell of Blockstream provides in publicly stating a few days ago:
“We provide infrastructure, not control. Also, it’s a dubious move of unknown probability and profitability, as the chains would respond. And finally, we would not do that, because of ethics, legality and because we have real work to do, FFS.”
Yet Gregory Maxwell, formerly of Blockstream but just how formally who is to know, said in regards to checkpoints after so many blocks in BCH:
“Those ‘protections’ actually create much more extreme vulnerabilities against a high hashpower attacker.
Consider a simplification of their actual rules: ‘Don’t ever reorg more than 10 blocks’. Great, now an attacker with more than 200% of that network’s hashrate can produce two distinct forks ten blocks long which would each be longer than the chain produced by the normal miners.
The attacker then gives half the nodes on the network one fork, half the other fork. At that point the network is split into two networks and cannot heal on its own.”
That’s addressing an “abstract” and general point to highlight the potential vulnerabilities of checkpoints. Obviously, it is not laying a plan. Not least because it isn’t too clear whether Blockstream would benefit by not having the ability to tell big blockers to just go off to BCH.
Nor is it too clear whether they wouldn’t benefit by a quick test of 51% attacks knowing that BCH would probably still keep going, but in a somewhat even weaker or discredited position.
Nor is it clear who exactly it would benefit most, but what is clear is that this sharing of Proof of Work can be a problem for BCH.
That’s because there is plenty of incentive to get hash and mine on bitcoin, and plenty of incentive to not attack it because you’d just be burning your investment, but if a bit of hash can be sent to have fun for a day or two with this some other coin, then there might not be much disincentive and if your business relies on small blocks, then there might actually be incentive to play.
Now Blockstream has been brought into this article as a general point. There is no suggestion whatever this unknown hash is theirs and it probably isn’t. BCH is more profitable to mine right now, so hash has moved in accordance with basic logic and will probably move again when BTC becomes more profitable.
omergad no say it, this might actually be good for BCH because it might suggest it is undervalued as it is more profitable to mine and therefore may get more supporters, etc.
Yet conceptually, sharing hash with bitcoin while having so little of the total can be a problem because it’s not quite secure.
There’s a relationship as well, conceptually, between security and usage levels. Whether greater security attracts greater usage, is not clear, but if you want to move say $1 million BCH and it costs $10,000 to double spend it, then you’d probably not move $1 million BCH without some nervousness.
Presumably one doesn’t sit down to do these calculations. It’s just the “air” where you know you can safely move even $100 million in bitcoin, but maybe not as comfortably where “feels” are concerned if it is BCH instead.
This thus might perhaps lead to less usage if there is less security, but security follows price and price presumably follows usage so if BCH was say really feeling flippeningly, then its hash would probably increase correspondingly.
So the concern isn’t quite whether BCH can overtake bitcoin – ignoring obviously all other considerations and sticking solely to this technical hash aspect. The concern instead is whether BCH can’t just be kicked down if it is or stays stagnant so as to sort of take it out of the picture in realistic terms.
From a greater analysis perspective of whether you can fork and whether anyone can control bitcoin, this wouldn’t matter because if it does happen, the coin would have already lost the confidence of most and no one would have cared anyway.
That’s not something that quite applies to BCH, so it is probably unlikely, but as a far smaller coin it does have certain special considerations and it does need some sort of realistic thinking because it is arguably very vulnerable due to BTC having a far bigger community and thus resources.
On the other hand, if BCH didn’t exist, then something like it would probably be necessary because it keeps bitcoin on its toes, but where BCH is concerned, as well as bitcoin and all other cryptos, there is now far too much competition.
The crypto space is arguably or at least hopefully on the verge of a breakthrough in regards to technical aspects as far as scalability and capacity is concerned, with a burst in experimentation so presumably leading to a solution in the end.
We’re not quite there, but arguably we’re not far off either. Two or three more years and you’d expect the scene to look a lot differently.
Meaning right now it is a race, and if you do not run, well, you fall off the race.