Let's say there was a catastrophic event that split the internet and disconnected Australia and the surrounding islands from the internet for 36 hours. Let's a

Let's say there was a catastrophic event that split the internet and disconnected Australia and the surrounding islands from the internet for 36 hours. Let's also say for the sake of argument that 10% of the BTC mining capacity is in that region. The network self-adjusts so that every hour 6 blocks get confirmations, but over this short time period you wouldn't expect this to happen. This means that every hour the Australia split would confirm 0.6 blocks and the non-Australia split would confirm 5.4 blocks. After 36 hours Australia would have confirmed ~21 blocks, and according to your proposal, the first of these is now 'accepted' and can't be rolled back. In the same time the remainder of the network would have confirmed ~194 blocks, many of which are now accepted. What would actually happen according to the consensus protocol is that RestOfWorldBTC is the longer chain and therefore "is" BTC, and AustraliaBTC would get thrown away. Any BTC transactions made in Australia during that time would get rolled back. But if blocks become permanently accepted then these 2 chains are fundamentally incompatible; they are no longer the same coin. Your proposal says that the network should fork into 2 coins here -- AustraliaBTC and RestOfWorldBTC. This would be a pretty disruptive event. People who traded BTC for services in Australia would claim that they paid their obligation (after all, it's in an 'accepted' block) and therefore don't owe their counterparty any RestOfWorldBTC. But AustraliaBTC would likely become worthless very quickly, given that most of the transactions in those 36 hours were confirmed on the RestOfWorldBTC chain. Australian counterparties would get stiffed pretty hard. OTOH, if you roll back those transactions and accept the mainline, those counterparties can more easily argue that you still need to pay them. Note that the network can't enforce you paying these obligations, but the legal system still exists! And assuming the actors were acting in good faith and didn't attempt to double-spend their coins, their transaction would get re-propogated automatically and get included in a future RestOfWorld BTC block once the network split ended.