Bitcoin Cash: Split, Hard Fork and 51% Attack

Recently, the Bitcoin Cash network, which emerged as a result of long disputes and a hard fork, turned one year old. Over the entire period of its existence, the controversy has not only not subsided, but is also gaining new momentum. The stumbling block for the community is the vector for further development and modernization of the network.

The latest heat of passion began after the protocol update and release prepared by the BitcoinABC team with a number of updates to the functions of smart contracts and support for atomic swaps, which completely remove the need for a third party when different blockchains “communicate” with each other.

But the proposed pre-consensus protocol was severely criticized by the “self-proclaimed Satoshi Nakamoto” and Craig Wright.

Wright I am sure that no one will use this code, and those who want to support pre-consensus can create a separate chain. With a united front against the changes, Wright and Ayre are actively promoting Craig Wright's own version of Bitcoin SV, promising to dedicate the full power of their mining pools to support this token.

Bitcoin Cash now finds itself in a situation where the two largest pools control exactly 50% of the hash power. And yesterday, Coingeek and BMG Pool gained more than 58% control over the Bitcoin Cash network between them, for a short period of time. 

The two large pools are owned by different operators, but Coingeek's Craig Wright and Calvin Ayre are pretty close. “Experts” and simply alarmists immediately rang all the bells, fearing collusion and deliberate 51% attack.

Control of more than 51% of the hash power of the network that provides coin mining gives attackers, according to some “experts”, the opportunity to double their own assets, gain control over the blockchain and threatens the basic principle of the system - immutability. As a consequence of this attack, there is a sharp drop in trust within the network and an increase in the number of necessary confirmations of transactions by exchanges while this situation continues.

But this situation may also be a deliberate demonstration of “muscle” before the upcoming November Bitcoin Cash hard fork, which potentially threatens the division three currencies - BitcoinSV, Bitcoin ABC and Bitcoin Cash.

At the moment, it is impossible to give any guarantees regarding the hard fork planned for November 15th. Recent changes in the Bitcoin Cash community have brought it closer than ever to a split with unpredictable consequences.