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Here’s a look into some of the possibilities post the BCH hard fork and what can happen if Bitcoin SV manages to occupy the majority hash power. Put your seat-belts ON.
The Bitcoin Cash (BCH) network is likely to split today according to the scheduled hard fork. The hard fork will see the crypto splitting into two version, the core i.e. the BCH ABC and the Satoshi version BCH SV. Over the past few days, there was some intense exchange of heat between the supporters of the each.
The “hash war” has escalated to new levels. Also, the mining pools now gear up with their computing power to show support for their favored implementations. However, the controversial supporter Craig S. Wright is sending constant threats to the opposite camp. Wright, the self-acclaimed Satoshi, is supporting the Bitcoin SV version. At several occasions, he has threatened to destroy BCH ABC supporters while vowing to destroy the ABC network.
Earlier this month, Wright tweeted:
“An SV miner can even legally kill off a chain. That is the miner’s right. This is what bitcoin is”.
In a stingy email to Bitcoin ABC supporter Roger Ver, Wright has threatened some gore consequences. Well, he has even threatened to pull down the Bitcoin price to $1000. Whether real or unreal, the shorts are fired at a very high intensity.
Moreover, the market is already showing some jittery signs within the last 24-hours. On Wednesday, Crypto market crashed below $200 billion with Bitcoin making a new 2018 low.
Hash Power – the Deciding Factor
Hash power is nothing, but the computing power sourced by the miners to support the blockchain. Just days before the hard fork, we have seen the hash power fluctuating between the two BCH camps. However, the BCH SV supporters are currently having an upper hand on this.
According to the underlying architecture of Bitcoin Cash, if Bitcoin SV manages to 51% say in the hash power, it can launch attacks on the minority chain. And Wright’s intention shows he is much likely to do it. Peter Rizun, the chief scientist of Bitcoin Unlimited says that the upcoming hash war is the biggest test for Bitcoin network’s underlying security assumption, called the “honest majority”.
Bitcoin whitepaper says that the honest majority assumption depends on the basis the 51% nodes should behave non-maliciously for guaranteed security.
Rizun told CoinDesk:
“The security of blockchains come from economic incentives, not from math. We cross our fingers and hope that a group of attacker nodes will choose to play by the rules. Maybe they won’t. The coming hash battle is putting Satoshi’s assumption to the test.”
Longest Chain Rule and Replay Protection
Wright sees the upcoming BCH hard fork and blockchain split in view of Bitcoin Longest chain rule. It means that Bitcoin’s consensus mechanism will default to the longest chain wherein multiple blocks appear simultaneously. In case of blockchain split, this will be a fight to the death between the competing chains. In such a case, the last standing chain will be the “true” Bitcoin Cash by nodes.
Note that both the implementations, ABC and SV, have denied adding the replay protection mechanism. It is the mechanism that allows users to spend funds safely in case of a split. It means that without these security precautions, users could end up losing funds while transacting on the split chain.
OpenBazaar developer Chris Pacia told CoinDesk:
“Users potentially stand to lose money because of this decision. Not adding replay protection is a dick move.”
Empty Blocks – Taking Miners to Oblivion
Rizun talks of the possibility where the Bitcoin SV chain, supported by Wright, can mine empty blocks which do not contain any transaction. Along with the majority hash rate, users’ transactions can get possibly rejected from the chain. This can further push the blockchain into absolute inactivity creating a huge damage.
Rizun says that SV supporters having nothing to loose “assuming they have majority hash power”. They spend a lot of resources to find a block, only to have it orphaned and lose the 12.5 BCH block reward. The honest miners might give up,” Rizun explained.
The Possibility of Double Spend Attack
With Bitcoin SV gaining majority hash power, their attackers can also perform the “double-spend” attack. The double-spend is an attack wherein the attackers print some non-existing funds from an exchange. Furthermore, with the majority hash power, the miners can also produce blocks in secret. These blocks can contain false transactions before injecting them into the blockchain.