In line with a recent news ‘published‘ by Coin Dance, Bitcoin Cash [BCH] mining centralization has reached a max. level where only just 1 pool is controlling half of its hashrate.
The crypto statistics service found that BTC.TOP ‘mining pool‘, a China-based non-public [public] entity, took over as high as 50.2 percent of the entire Bitcoin Cash [BCH] network at some point today. It contributed the hashrate of 679 PH/s against major competitory pools along with BTC.com [257 PH/s], ViaBTC (215 PH/s], AntPool [125 PH/s], and Bitcoin.com [187 PH/s].
Bitcoin Cash And Variance
The notable increase may have taken place due to the variance but, at the similar time, it threatens the Bitcoin Cash network with a potential fifty one percent attack scenario. The Roger Ver-led blockchain project has been criticized before for failing a “stress test,” conducted at the dictation of an anonymous developer(s) called Bitpico. Proof showed that 98% of all the Bitcoin Cash [BCH] nodes were sitting on a similar server rack which exposed the ‘coin‘ to seizures and security threats.
Earlier in 2018, Alex Simons, the identity division chief at Microsoft, found that increasing block size like those done by the Bitcoin Cash [BCH] team vulnerable decentralization over second-layer quantifiability solutions like Lightning Network.
“While some blockchain communities have raised on-chain transactions capability [e.g. block size increases], this approach usually degrades the suburbanized state of the network and can’t reach the uncountable transactions per second the system would generate at world-scale,” he had same.
Bitcoin Cash And Decentralization
The central facet of any decentralized blockchain project is its ability to protect the system against central management. In an exceedingly worst-case scenario, malicious mining entities may mix their hashrate output to make a stable coalition. It may modify them to forestalling transactions from obtaining confirmed; it may enable them even to reverse the confirmed transactions or pay one valid token double by making a brand new chain or by neutering previous blocks.
Bitcoin Gold, as an example, suffered a 51 percent attack on its network in 2018 when attackers double-spent BTG tokens for many days. They eventually were able to steal around $18 Mln price of Bitcoin Gold [BTG] tokens, in line with the BTG/USD rate of exchange at the time of the attack. Even in Aug. 2016, 2 Ethereum-based crypto projects namely, Krypton and Shift, additionally suffered 51 percent attack on their networks.
In some cases, mining pools that accidentally crossed the 50 percent hashrate barrier voluntarily reduced their computing power with the aim of redistributing it to some other mining pools. GHash.io, as an example, had exceeded 50 percent of the total bitcoin’s computing power, earlier in July 2014 but reduced it back to 40 percent once facing a community backlash.
What BTC.TOP may do is what GHash.io had already done in its time: abandoning of a number of the computing power to reinject trust within the Bitcoin Cash [BCH] network. If it doesn’t cut back, the digital currency may suffer vastly as investors’ sentiment wears off.