Bitcoin Cash To Become Victim Of It’s Own Flaw? - Would Be Hilarious! - Exchanges Protect Yourself And De-list!

in bitcoincash •  3 months ago

More and more minority PoW coins are being attacked in a very profitable way, and Bitcoin Cash could finally be the jackpot. The cost of an attack is quite high, but the reward can be huge if carried out perfectly. Furthermore, there is an event coming up that will make an attack much easier and cheaper.

Exchanges, do yourself and the community a favour and de-list every minority PoW coin, especially Bitcoin Cash, because at the moment there is a huge risk for a major theft what will harm the reputation of the entire ecosystem.

Bitcoin cash boomerang.jpg
The flawed EDA that Bitcoin Cash used to destabilise Bitcoin could come back on them.

Exchanges: Please don’t be the one to lose millions in a ‘double spend’ event and give the media the opportunity to write misleading headlines like ‘Bitcoin is hacked’….. Or like this:

misleading headline.png

The possibility of a 51% attack

A 51% attack creates the ability for the attacker to double spend a transaction. To execute the double spend on an exchange makes most sense, because another crypto can be bought and send to an external wallet immediately. After Bitcoin Gold and Verge, was Zencash now the one to be 51% attacked.

The attackers managed to revert 38 blocks and steal 550,000 dollar. A 51% attack on Zencash cost around 7,000 USD per hour and since 38 blocks will take some more than 1.5 hour the theoretical cost of this attack was less than 11,000 USD. This gives a ROI of 5,000% in one and a half hour. Not bad right?

Cost zencash attack.png
https://www.crypto51.app

Bitcoin Cash is the most valuable minority PoW coin, and because the liquidity is also the highest, the biggest profit can be made. Of course it is also the most expensive attack to carry out and only 11% of the hash rate can be rented, so 89% have to be owned by the attackers.

cost bitcoin cash attack.png

Since BCH is the only minority PoW coin that can be shorted with high leverage there is a huge bonus for the attackers. Bitcoin Cash really could be the ultimate jackpot. It is very possible that a group of miners is practising on small coins to finally be able to attack BCH perfectly.

They could wait for the perfect moment, like the event I will describe later, it will make an attack much more easy and less expensive. But when they are able they could do it tomorrow too, who can resist a huge honey pot like that?

The flawed EDA

Bitcoin Cash was created without consensus, so only less than 5% of the miners were mining it. To prevent it from dying on arrival the Emergency Difficulty Adjustment was implemented. This made the difficulty adjust faster to a change in hash rate. Because the EDA was not carefully written and tested (BCH devs lol) the difficultly overshoot every time.

This made mining BCH extremely easy whereafter the new adjustment kicked in. Then it became very hard till the next adjustment and so on. At the moment that it was easy to mine it was extremely profitable and miners left BTC and filled their pockets with easy to grab BCH. BCH was able to take 70% of the total hash rate on a certain moment!

In November 2017 the EDA was forked out and the network stabilised, but a minority kept mining the old chain and Bitcoin Clashic was born.

The EDA could be the ultimate boomerang

The EDA is happily forked out of BCH, but it’s legacy is still around. Because of the times of super fast blocks (hyperinflation) the block number of BCH is far ahead, and this will probably cause major problems over time. One of the BCH devs admitted that the EDA was also created to destabilise BTC, but hilarious enough it could come back to them as the ultimate boomerang.

https://nulltx.com/bch-eda-was-designed-to-cause-bitcoin-network-congestion-former-dev-claims/

eda dev.png

The upcoming halving

Because the hyperinflation caused by the EDA, the block count of BCH is still a few weeks ahead of BTC. In the summer of 2020 the halving will take place, and since this is planned on block number it will happen a few weeks earlier in BCH. After the halving the block reward will be reduced from 12.5 to 6.25 coins.

There will be a period of a few weeks where Bitcoin miners are rewarded with 12.5 BTC when they find a block, while Bitcoin Cash miners who find a block will only receive 6.25 BCH. Also, mining BTC gives more additional income in the form of fees, BCH miners are way more reliable on the block reward.

In this period there will certainly be a huge outflow of miners from BCH to BTC, and a 51% attack will be very easy and cheap at that time. FUD and slow blocks could cause the price to tank and even more miners might leave. A very profitable attack can be carried out with more than 50% discount this day.

Bitcoiners are looking forward to the halving and celebrate it because the supply will decrease and this will boost the price.

For Bcashers it may be doomsday………….

Conclusion:

In one and a half year attackers will get more than 50% discount to take the jackpot of the 51% attacks, but seen the great profitability it could happen any time. Fact is that this type of attack is becoming very popular, so I would advice all investors to swap your minority PoW coins for majority coins and exchanges and merchants to de-list all the minority coins. A major hack of a bigger alt coin like Bitcoin Cash will not only harm your exchange, but the entire ecosystem.

Disclaimer
This is no financial advice, just my view on the market.

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Hey, @michiel Really great work my dear friend and I am glad to seen your daily post .many many thanks for sharing with us your important post.
Post resteem done

I sold all my BCH. Im big on bitcoin so while I wouldn't cheer for this I think it would allow Bitcoin to gain even more market share dominance which I think is good. I would like bitcoin to be the gold standard with fewer and fewer alt coins when big money really starts flowing. I think diversification in alt coins is better when we have strong foundations in place.

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BCH is a temporary diversion that is going to blow up

Your point about the window of opportunity is a good one. We should keep a close watch on the mining power of bch and btc leading up to that period.

I reckon your right

Not sure what you have in mind. Bitcoin orice increase may slow.

You really "hate" Bcash and your worries are legit!

As you said in one of your last posts, Bcash is a easy target and very unprotected, the numbers don´t lie. If I was a responsible for an exchange platform, I would consider your advice seriously.
I hope nothing happens, because in the end it will only hurt the crypto world.

bitcoin is very powerfull....its have the power to change our life

I wonder if I could touch a bitcoin,but unfortunately its a digital currency.

Bitcoin is unstoppable, it is the decentralized engine, though transactions are public.
But untraceable currencies such as Monero are poised to capture a decent part of the market share. Stay thirsty my friends.

Great post @Michiel - Keep spreading the important news! I really appreciate it.

The market will decide which coin succeeds. Proof of Work has its positives so I won't say its over for those type of coins.

this is just one big pile of FUD ,ignoring it and moving on to real news.

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He is embarrassing himself lol

Wow! That's a great info for me. Haa!! A friend of mine resently sold off his BTC, @whiteangelistech. Already feeling for him. Thank alot man, for the head-up. Hope things would workout well.

Very interesting analysis. First time I have seen this reported, good insights.