Bitcoin is not just a network, but rather an organism; an organism whose lifeblood is the SHA256 mining algorithm. When BTC and BCH split last August it signaled that the organism was making efforts to mutate and evolve. The upcoming Hashwar that will begin tomorrow, Nov 15, is another mutation in the continued evolution of Bitcoin. It should not be feared but will be a historical event that will be recognized as one of the key evolutionary steps of the Bitcoin network.
Since the Bitcoin network split in August of 2017, the Bitcoin network has existed as 2 mutations of the same organism, known as BTC and BCH. The BCH network has maintained a scheduled upgrade via hard fork every 6 months and tomorrow’s planned hard fork pits two BCH mutations, BCHABC and BCHSV, against each other in a Hashwar. A Hashwar is a term used to represent the efforts of a group of aligned Bitcoin miners to enforce their rules of the network by gaining more than 51% of the network. If a miner achieves more than 51%, they can reliably ensure their rules control the network. When these new rules are enforced, a chain split will happen. This is what occurred with the BTC and BCH split last year. However, unlike last year, there is evidence that the winning chain will also attack the minority chain that has less than 51% of the hashrate until it dies!
The BCHABC and BCHSV Hashwar will not be isolated. Since the SHA256 is the lifeblood of the Bitcoin organism, one cannot forget about BTC chain. This will be a BTC, BCHABC, BCHSV event that will affect all 3 chains. All 3 chains will be part of the Hashwar and are susceptible to being killed. Similar to the evolution of living organisms, organisms who do not adapt to new environmental effects will be killed and the living will continue to exist. No one knows for sure which chain will survive, but the obvious outcome of the Hashwar is that one mutation will most likely be killed off due to the aggressiveness of the latest mutation BCHSV.
Leaders of the future BCHSV chain has publicly stated that they will kill off the minority chain. Regardless of the aggressiveness of the BCHSV chain all chains have their own vulnerabilities that can lead to their demise. BTC’s vulnerability lies in its slow adjusting difficulty and capped blocksize. To the majority of miners, BCH has always been a long-term play because it represents a future where miners will play a big role in mining gigantic blocks that have a high future value with on chain scaling due to a large number of transactions.
In response to the vulnerable BCHABC chain, several miners on the BTC chain will also direct their hashrate at BCH. Because of this, It is possible that the BTC network will experience a hashrate decline as miners move to support the BCHABC chain out of fear the BCHSV might win the Hashwar, block times on BTC will slow and that will cause transaction fees to spike. The BTC blockchain mempool will start to increase because BTC’s blocksize is limited and the slow blocktimes will exacerbate the problem. The loss in BTC hashrate may also influence the price potentially causing panic, today we already see indications of this occurring. If a panic occurs, people become irrational and it will be interesting to see the effects on the BTC chain.
BCHABC’s vulnerability is in its apparent lack of miner support. Without miner support, the ruleset of BCHABC will not be enforced. Currently, the hashrate of the BCHABC ruleset is ~20% of the network on the eve before the Hashwar. In addition, BCHSV miners have indicated the intent to kill off the chain. If Hashrate does not transfer to support BCHABC, the chain will be easily killed by the BCHSV chain. This will be done because the BCHSV miners will continuously force reorgs of the BCHABC chain making the chain unreliable. This will continue until the economic support of the markets has faded and chosen a BCHSV as the future BCH chain.
BCHSV’s vulnerability is in the lack of support from the BCH economic markets. Because of this lack of support, there is a strong following that is willing to transfer the mining hashpower to the BCH chain to fight the BCHSV chain. However, this fight will require a significant amount of influence to convince miners from the BTC to join in the Hashwar. The scenario that prolongs the fight against BCHSV is the scenario where BTC’s vulnerability will be exposed to attackers.
Tomorrow’s Hashwar will be an important event in the evolution of Bitcoin. While unlikely, It is in this scenario where the BCHSV mutation may kill off the BTC chain and not BCHABC. However, the more likely of outcomes is that BCHABC chain will die off and BTC and BCH will continue for the foreseeable future or until the next mutation. Those who are expecting three chains after the Hashwar will be disappointed.