The Bitcoin Cash blockchain is seeing considerable variations in the number of blocks found with an unknown entity apparently gaming the difficulty adjustment.

No block was found for three hours yesterday in what is considered as very statistically unlikely.

There are suggestions it is was due to an entity removing their hash, so making it very difficult for other miners to find a block.

Very rare BCH block, Oct 2019

As you may know the BCH algorithm is same as for bitcoin, with the amount of computing power required to find a block increasing as more asics join the network and vice versa.

It appears after this block a lot more asics have indeed joined with miners now finding a very unusual number of blocks, some 20 in the past hour, as opposed to six.

Unusual number of BCH blocks, Oct 2019

Unlike in bitcoin where difficulty changes every two weeks, in BCH it is by the block. That should keep blocks running at six per ten minutes, but there’s clearly an attack vector if you have a huge amount of hash.

You can turn the hash on, for example, wait for difficulty to increase, and turn it off, so slowing down the network.

Or vice versa, you can turn the hash off, wait for the difficulty to fall, and turn it on, so leading to far more blocks than there are meant to be, with this potentially programmable.

BCH hash, unknown in grey, Oct 2019

The total hashrate itself does not appear to have changed much, but the proportion of it that is unknown has increased considerably recently.

If the miner is not a fan of BCH, with plenty of candidates there, instead of 51% attacking to just double spend their own coins, they could do what they are doing: increase the inflation rate and earn more coins for themselves in a cheatingly way.

The effect of that would be to just bring the halving quicker for BCH, with its ratio against bitcoin falling yesterday.

BCH difficulty, Oct 2019

This is an interesting chart, showing the ladder because bitcoin’s difficulty usually only increases as its hashrate keeps going higher.

On August the 1st 2017, BCH chain-splits, thus its difficulty starts looking a lot different, up and down in a fairly messy manner.

Initially the variation was huge, but an algo change slowed it down, with the BSV split last November showing that big drop.

Yet because the BCH hashrate is far smaller than bitcoin’s at just 2.8%, its difficulty has never really found stability, up and down consistently.

In the past few days it has jumped, but as the block numbers show, it is clearly being gamed.

Why? Presumably for profit, either from more BCH directly or to push cashers to bitcoin and so benefit indirectly if the entity has bitcoin.

That this is possible has always been known because BCH is the minority chain while sharing the same hash, so allowing bitcoin miners to easily attack it if they want.

Many of those miners happen to support BCH, so there haven’t been any problems, but just Blockstream itself has around double BCH’s hashrate.

Blockstream’s business model relies on bitcoin being stuck at or around 1MB, so there would be a clear motive to undermine BCH, but there is no evidence of involvement in this case and it could well be someone else.

The real solution to this problem is changing the algorithm so that it doesn’t share the same miners as bitcoin, but that would be sort of kicking out the current asics miners who largely support BCH and at times even defend it.

So presumably for now the solution is to wait and see what happens, with it unclear whether blocks are being orphaned, but if this continues a new algorithm might be needed although it seems unlikley the miner would do anything but speed up block times, and thus temporarily increase supply inflation.

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