We are going to see a real 51% attack soon
If you have followed the recent Bitcoin Cash drama you may be aware that Craig Wright has potentially enough power with his mining pools to control both sides of the upcoming fork.
I thought the interview with Tone Vays was remarkable where he explains how he and his allies control most of the mining power. Something to the tune of 70-80% of all the hashing power to be exact.
This likely will make most miners simply switch away from the ABC chain and just mine btc, tipping the scale even further.
This is an actual 51% attack
Now to me this is really interesting because this is an effective 51% attack.
The normal governance structure on bitcoin is that the miners decide rules which the market then rewards or not. If the miners do a good job the market value should reward them. Else they die.
Here however what the market wants is trumped by the hashing power of one party. Now this may not be correct a statement because, well we are talking about a coalition. Still this coalition effectively can kill the other side making the market itself irrelevant if they actually do as they say (being able to mine with a loss for 2 years). Is this coalition really an honest party?
Here the market dies. WTF!
This actual attack, if it happens, would be the first time a real 51% attack happens over a long time actually killing an entire chain, that is pretty valuable. Yes we have seen this on small chains for quick gains, but here we have someone actually taking over and controlling an ecosystem.
I am fascinated by this experience and every time these forks and economic wars happen we learn something new. This is truly new historical territory.
We see that the SV side of the chain has the majority hashpower or about 85%.
What is the economic impact of a party ruling in bitcoin
Now really I am excited to see what will happen when one party actually controls a chain. My understanding so far was always that decentralization was required for its security. We will now have a chain that is controlled by one party effectively.
The interesting part is that this party will suffer if people don't suypport it, so while they are in control they must convince users they are good for them. I don't think this can work.
Truly fascinating. I look forward to see what this 51% attack is going to have as an outcome.
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It is indeed very exciting. I predict that BCH or more precisely Bitcoin ABC will still win. Even having massive miner support is not enough because the miners do not have all the power.
As long as the investors prefer BCH over BCHSV, the token they mine with their ridiculous hash power will not be valuable. And then the great part of POW is that they need to pay for that and they cannot do that with mining a shitcoin with huge hashpower. Even though they have the hashpower, they are fighting the markets and cannot win.
When they attack the ABC chain, the transaction fees will rise and this may even mean that BTC miners will join BCH to cash in the transaction fees.
What they need to do to win is not only have hash power, but convince the investors to value highly a strange scammy coin that is attacking others with disruptive behaviour that is also highly centralised. I dont think that will happen in the long run, though in the short run they could do a lot of damage to BCH. I predict the real winner will be BTC, but I will follow the details closely. Studying this will be quite exciting.
That's why I hate BCH. Very less 'decentralized'
Yea this is truly centralized now. Craig sais this is irrelevant. We will see.
I'm excited to see what happens there, too and I wonder what impact will it have, Thanks for sharing this post, @knircky.
That is very interesting ....
Traditional crypto investors will likely not like this but do traditional crypto investors still represent the bulk of people that invest in crypto ? What I mean by that is not everyone is invested in crypto because they want it to replace fiat. That is a secondary thought to some. There is a large group that are invested in crypto because they want more fiat and to have the financial freedom that comes when your coin of choice moons.
I do think today there are more traditional crypto investors still in the market but I also believe the lets get into crypto to become fiat rich group is growing and they care less about the traditional use of crypto and are more profit focused. So as long as they are making money from a coin they will support it.
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Civil war drama... gotta love it! 😂
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I am also interested in seeing what will be the overall outcome when one party fains full control.
I hadn't been following it that closely, but that's fascinating. I guess good for him for getting a coalition together to push the chain the direction that he wants it to go, but like you said, there isn't decentralization in that. People concerned about centralization (which more crypto people are) are not going to be excited about that.
With the recent drops in the price of Bitcoin (BTC), I think there's potential for a 51% attack there eventually. If the price declines too much, miners could suspend mining until it becomes profitable again. If that were to happen, some of the farms in places like China or Russia could be in better position to perform 51% attacks. It's something that I'll be watching as we see BTC move into even lower prices.