Published: 2018-11-21 22:22:11
A Look At The Possible Scenarios Following Bitcoin cash Hard Fork
At block 556767, on November 15th, the Bitcoin Cash network was divided into two offspring; Bitcoin ABC and Bitcoin SV. Following the fracture, both the factions claimed their rights for BCH brand name, and just like before the hard fork, no consensus has been reached.
In the near future, there are a few scenarios can happen depending on the sequences of events that take place.
Scenario 1: BCH Is Retired And Bitcoin ABC And Bitcoin SV Become Independent
Noth ABC and SV can grow to be independent chains and flourish in their own right. Even though possible, this scenario is extremely unlikely. Influential entities like BitGo, Kraken, and CoinMarketCap have reinforced that they are using the Bitcoin Cash brand for ABC. Strong resistance of SV supporters like CoinGeek and nChain almost make sure that hash wars will go on for a very long time.
Scenarios 2: The Hash Wars Forces One Side To Give Up
The hash wars could end if one of the chains gives up. Still, it is unknown who would be the arbiter of the winning chain, and both may try to produce “the longer chain.” Exchanges may become arbiters as some are ready to accept one version over the other. There is no timeframe for deciding which chain would be longer, but even one block could suffice. Nodes, however, are not enough to define a version’s dominance in the final analysis. Based on the Bitcoin white paper, the principle of deciding on the version of the blockchain entails both nodes and miners. As it says there, “The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”
If ABC miners move their hashes back to a more profitable chain like Bitcoin, it makes way for SV miners to try an attack on the ABC chain. If instead, SV miners make the move, the vice-versa will happen.
Scenario 3: ABC Changes PoW
In case the attack becomes too long and too expensive, the impossibility to save the ABC version by brute force mining may lead to an emergency upgrade. Talks of a possible proof-of-work (PoW) change, in essence, making the chain independent, may leave the SV version free to mine the old type of blocks while having no way to take over the ABC version.
This would end the hash war but at the cost of losing the security provided by ASIC miners. It will also endanger the trust of a decentralized network, as it basically centralizes authority in the hands of the ABC developers.
Scenario 4: They Start To Attack Each Other
If none of the sides give in to the hash wars, one side has the possibility of attacking the other.
There are two ways ABC supporters can initiate attacks; forcing a sell-off of SV coin and initiating a 51% attack on the SV. Jihan Wu, who is the founder of Bitmain and a supporter of ABC says that he may start to sell his SV coins.
While the scenario for SV is much different as they do not seem to have enough hash rates to start an attack. They currently have 65% of ABC’s PoW and their hash rate is only 67% of their rivals. Although, SV poses a threat of lack of replay protection between the two.
The views and opinions expressed in the article Top 4 Scenarios Likely to Play Out Post Blockchain Split do not reflect that of 48coins.com nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.