[bitcoin-dev] New difficulty algorithm needed for SegWit2x fork? (reformatted text)
ZmnSCPxj at protonmail.com
Wed Oct 11 02:48:13 UTC 2017
Good morning Ben,
I am not Mark, and I am nowhere near being a true Core developer yet, but I would like to point out that even under a 51% attack, there is a practical limit to the number of blocks that can be orphaned. It would still take years to rewrite history from the Genesis block, for instance.
What little data we have (BT1 / BT2 price ratio on BitFinex) suggests that tokens solely on the 2X chain will not be valued as highly as tokens solely on the Core chain. As miners generate tokens that are only for a specific chain, they will have higher incentive to gain tokens on the Core chain rather than the 2X chain.
As is commonly said, hodling is free, whereas mining is not. Hodlers have much greater power in hardfork situations than miners have: simply by selling their tokens on the 2X chain and not in the Core chain, hodlers can impose economic disincentives for mining of the 2X chain.
Miners can switch to BCH, but that is valued even less than BT2 tokens are, and thus even less attractive to mine on.
We should also pay attention, that BCH changed its difficulty algorithm, and it is often considered to be to its detriment due to sudden hashpower oscillations on that chain. We should be wary of difficulty algorithm changes, as it is the difficulty which determines the security of the chain.
If we attempt to deploy a difficulty change, that is a hardfork, and hodlers will be divided on this situation. Some will sell the tokens on the difficulty-change hardfork, some will sell the tokens on the non-difficulty-change hardfork. Thus the economic punishment for mining the 2X chain will be diluted due to the introduction of the difficulty-change hardfork, due to splitting of the hodler base that passes judgment over development.
Thus, strategy-wise, it is better to not hardfork (whether difficulty adjustment, PoW change, or so on) in response to a contentious hardfork, as hodlers can remain united against or for the contentious hardfork. Instead, it is better to let the market decide, which automatically imposes economic sanctions on miners who choose against the market's decision. Thus, it is better to simply let 2X die under the hands of our benevolent hodlers.
Later, when it is obvious which fate is sealed, we can reconsider such changes (difficulty adjustment, PoW change, block size) when things are calmer. However, such changes cannot be safely done in response to a contentious hardfork.
If indeed the Core chain is eradicated, then Bitcoin indeed has failed and I would very much rather sell my hodlings and find some other means to amuse myself.
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