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Bitcoin protocol is defined by bitcoin core client, and I would guess more than 99% percent of the services that process bitcoin transactions use that client. T

Bitcoin protocol is defined by bitcoin core client, and I would guess more than 99% percent of the services that process bitcoin transactions use that client. The services don't follow actively the hash rate and they won't change the client based on that - the network automatically adjusts to the hash rate available so that blocks come each 10 minutes. If there would exist some other cryptocurrency with more hash rate doesn't mean that services would start calling that one bitcoin.

buttershakes 9y ago
That's not what it means. You are right that those clients would begin rejecting blocks, but you can be sure that when customers are calling them asking why their transactions aren't being validated that they will switch. It's not economically feasible to run a business on a minority hash power chain with low transaction throughput.
- jerguismi 9y ago
  "when customers are calling them asking why their transactions aren't being validated that they will switch." If majority of hashpower would start mining invalid blocks, there would still be some amount of hashpower mining the real chain. Transactions would confirm, albeit more slowly. For the miners mining the real chain the situation would be very good, because less competition from other miners -> more found blocks, more money. Probably the hash rate would grow pretty quickly, and if it wouldn't, the difficulty target would adjust after the 2 week difficulty adjustment period, and confirmation speeds would be back to normal.
  - buttershakes 9y ago
    The taking a little while to adapt is because their is less hash power, which means it takes longer to find blocks which means the remaining hash power will have less blocks for many many weeks. This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart. Then when the difficulty has fallen enough to make mining profitable and have a consistent 10 minute block time the larger hash power chain will be able to mine at a significantly faster rate on the lower hash power chain and that will make it susceptible to a %51 attack. The only way to avoid that scenario will be for them to switch the proof-of-work or manage to get a lot more hash power back on their chain. Being on the minority chain in that situation is frankly dangerous, the value should be discounted appropriately.
    - jerguismi 9y ago
      "This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart." The blocks would happen farther apart, but it would also mean that the remaining miners would have much higher change of actually finding a block, since there would be less competition. Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward. Also probably people/exchanges would increase the fees since competition would be bigger to get the transaction to a block. Also, it would make sense for exchanges etc to buy some mining power. That would make blocks appear faster, and also they would get the mining reweards, so it might be net positive. Or just simply bribe some miners to mine the valid chain. Very easy way to do that would be just to increase the transaction fees that they put to transactions.
      - buttershakes 9y ago
        This isn't the way it would go down. :) Let's wait and see...
      - ErikBjare 9y ago
        > The blocks would happen farther apart, but it would also mean that the remaining miners would have much higher change of actually finding a block, since there would be less competition. That's not true. The chance of finding a block is the same for every hash given a certain difficulty, regardless of competition. So a miner with a certain amount of hashing power will always have the same chance of finding a block until the difficulty changes.
        FabHK 9y ago
        Seems to me GP is right: The remaining miners make the same amount per day, until difficulty is adjusted, and then much more. Consider this: one pool with 20% hash power. They only get every 5th block, i.e. 1 coinbase reward every 50 minutes. Now all the other miners fall away. Now this pool will still take about 50 minutes to find a block, but it will get 100% of them, thus still being rewarded a block every 50 minutes. However, 2 to 10 weeks later (depending when the last difficulty adjustment was) (or longer, if difficulty adjustment is capped), a block is found every 10 minutes again, and the pool gets 100% of them, thus 5 rewards in 50 minutes. On the other hand, gp also said: > Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward. If I understand correctly, that the hypothetical 20% mining pool would immediately get 100% rather than 20% of all transaction fees when the other miners fall away. However, AFAIK the coinbase (mining reward) dwarfs the transaction fees (for now), so that should not be that relevant.
- BenoitP 9y ago
  As long as one miner is still mining the core chain, the transaction will be validated. It may take a little while at first, but difficulty will adapt. It's going to be 2 legitimate currencies that are going to differ in value in exchanges. And each current BTC holder will be able to spend 2 coins (provided they take precautions against replayability; like making at first a double-spend to different wallets on the two chains separately) Now the question is: what will the most BTC-rich people do?
  - buttershakes 9y ago
    It would take years for the difficulty to adapt to a 10 minute block time if the hash power dropped that much, there is a limit per two week adjustment period. More than likely the code would have to be modified to accommodate a rapidly dropping difficulty. See my other post, but that essentially destroys the security of the minority chain. BTC rich people are on both sides of the debate, expect to see some dumping all around as they make their positions known.
    - BenoitP 9y ago
      Not years. The difficulty is recalculated every 2016 blocks (14 days)[1]. If one chain has 10% hashing power, for less or equal to 14 days the transactions could take 10 times more to validate. But that's assuming markets aren't correcting miners in the "right" direction in the meantime. Who wants to waste electricity on undervalued coins? ---- Considering most of BTCs have been mined at the time bitcoin core had no competition; I'd say BTC rich people would tend to side with them. Because of emotional attachment, economic ties, and most importantly the dumb but very real reason of software maintenance. [1] https://en.bitcoin.it/wiki/Mining https://en.bitcoin.it/wiki/Mining
      - comex 9y ago
        But if blocks are being produced at 10% of the expected rate, it will take 14*10=140 days before the difficulty is recalculated.

buttershakes 9y ago

That's not what it means. You are right that those clients would begin rejecting blocks, but you can be sure that when customers are calling them asking why their transactions aren't being validated that they will switch. It's not economically feasible to run a business on a minority hash power chain with low transaction throughput.

jerguismi 9y ago
"when customers are calling them asking why their transactions aren't being validated that they will switch." If majority of hashpower would start mining invalid blocks, there would still be some amount of hashpower mining the real chain. Transactions would confirm, albeit more slowly. For the miners mining the real chain the situation would be very good, because less competition from other miners -> more found blocks, more money. Probably the hash rate would grow pretty quickly, and if it wouldn't, the difficulty target would adjust after the 2 week difficulty adjustment period, and confirmation speeds would be back to normal.
- buttershakes 9y ago
  The taking a little while to adapt is because their is less hash power, which means it takes longer to find blocks which means the remaining hash power will have less blocks for many many weeks. This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart. Then when the difficulty has fallen enough to make mining profitable and have a consistent 10 minute block time the larger hash power chain will be able to mine at a significantly faster rate on the lower hash power chain and that will make it susceptible to a %51 attack. The only way to avoid that scenario will be for them to switch the proof-of-work or manage to get a lot more hash power back on their chain. Being on the minority chain in that situation is frankly dangerous, the value should be discounted appropriately.
  - jerguismi 9y ago
    "This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart." The blocks would happen farther apart, but it would also mean that the remaining miners would have much higher change of actually finding a block, since there would be less competition. Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward. Also probably people/exchanges would increase the fees since competition would be bigger to get the transaction to a block. Also, it would make sense for exchanges etc to buy some mining power. That would make blocks appear faster, and also they would get the mining reweards, so it might be net positive. Or just simply bribe some miners to mine the valid chain. Very easy way to do that would be just to increase the transaction fees that they put to transactions.
    - buttershakes 9y ago
      This isn't the way it would go down. :) Let's wait and see...
    - ErikBjare 9y ago
      > The blocks would happen farther apart, but it would also mean that the remaining miners would have much higher change of actually finding a block, since there would be less competition. That's not true. The chance of finding a block is the same for every hash given a certain difficulty, regardless of competition. So a miner with a certain amount of hashing power will always have the same chance of finding a block until the difficulty changes.
      - FabHK 9y ago
        Seems to me GP is right: The remaining miners make the same amount per day, until difficulty is adjusted, and then much more. Consider this: one pool with 20% hash power. They only get every 5th block, i.e. 1 coinbase reward every 50 minutes. Now all the other miners fall away. Now this pool will still take about 50 minutes to find a block, but it will get 100% of them, thus still being rewarded a block every 50 minutes. However, 2 to 10 weeks later (depending when the last difficulty adjustment was) (or longer, if difficulty adjustment is capped), a block is found every 10 minutes again, and the pool gets 100% of them, thus 5 rewards in 50 minutes. On the other hand, gp also said: > Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward. If I understand correctly, that the hypothetical 20% mining pool would immediately get 100% rather than 20% of all transaction fees when the other miners fall away. However, AFAIK the coinbase (mining reward) dwarfs the transaction fees (for now), so that should not be that relevant.
BenoitP 9y ago
As long as one miner is still mining the core chain, the transaction will be validated. It may take a little while at first, but difficulty will adapt. It's going to be 2 legitimate currencies that are going to differ in value in exchanges. And each current BTC holder will be able to spend 2 coins (provided they take precautions against replayability; like making at first a double-spend to different wallets on the two chains separately) Now the question is: what will the most BTC-rich people do?
- buttershakes 9y ago
  It would take years for the difficulty to adapt to a 10 minute block time if the hash power dropped that much, there is a limit per two week adjustment period. More than likely the code would have to be modified to accommodate a rapidly dropping difficulty. See my other post, but that essentially destroys the security of the minority chain. BTC rich people are on both sides of the debate, expect to see some dumping all around as they make their positions known.
  - BenoitP 9y ago
    Not years. The difficulty is recalculated every 2016 blocks (14 days)[1]. If one chain has 10% hashing power, for less or equal to 14 days the transactions could take 10 times more to validate. But that's assuming markets aren't correcting miners in the "right" direction in the meantime. Who wants to waste electricity on undervalued coins? ---- Considering most of BTCs have been mined at the time bitcoin core had no competition; I'd say BTC rich people would tend to side with them. Because of emotional attachment, economic ties, and most importantly the dumb but very real reason of software maintenance. [1] https://en.bitcoin.it/wiki/Mining https://en.bitcoin.it/wiki/Mining
    - comex 9y ago
      But if blocks are being produced at 10% of the expected rate, it will take 14*10=140 days before the difficulty is recalculated.