Bitcoin cash difficulty adjustment period

Therefore Bitcoin Cash could remain more profitable than Bitcoin for longer periods, potentially causing disruption and transaction congestion on the Bitcoin network. However, a long difficulty adjustment window like this may contradict the Bitcoin Cash philosophy. A shorter difficulty adjustment period, larger blocks and lower block times improve usability, which is a key focus of Bitcoin Cash.

In contrast, longer difficulty adjustment periods, smaller blocks and longer block intervals, may improve resilience, which appears to be a key priority for the Bitcoin community. Therefore Bitcoin Cash is unlikely to adopt such a policy, in our view. Another issue with this longer two month difficulty adjustment window is that the level of disruption to Bitcoin Cash, relatively speaking, with respect to periods with fewer blocks, will be even larger than for Bitcoin.

Therefore this approach could be considered a lose lose type scenario.

Bitcoin Cash Difficulty historical chart

As we expressed above, ultimately, the win win scenario could be something like merged mining. BitMEX offers a variety of contract types. All contracts are bought and paid out in Bitcoin.

Why Bcash Mining Shouldn't Affect Bitcoin Much (But Bitcoin Mining Could Ruin Bcash)

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Bitcoin's Most Important Feature: The Difficulty Adjustment

Sign in. Log into your account. Password recovery. BitMEX Blog. Forgot your password? Get help. Click here to download the pdf version of this report Overview In our last piece we looked over the history of coins sharing the same hashing algorithm and some of the potential problems related to swings in the hashate between the two respective coins. A worked example of a Bitcoin Cash price increase For this rest of this piece, broadly speaking, we assume miners have the objective of maximizing profits in the short term. The following scenario applies to an increase in the price of Bitcoin Cash, similar logic can be used for other price movements: There is stable equilibrium, where each coin is approximately achieving its 10 minute target time and the hashrate distribution is broadly speaking allocated in proportion to the relative price of each coin.

The price of Bitcoin Cash increases. Bitcoin Cash then has higher mining profitability than Bitcoin and a significant amount of hashrate moves over to Bitcoin Cash. Due to the higher difficulty on Bitcoin Cash, some of the hashrate moves back over to Bitcoin. The Bitcoin block interval is longer than 10 minutes, since not all of the hashrate moves back over. More hashpower moves back over to Bitcoin, such that the hashrate distribution is approximately in proportion to the new relative price of the two coins, an equilibrium state. The below table illustrates the above example with actual numbers.

Illustration of hashrate oscillation dynamics — Increase in the price of Bitcoin Cash Initial state Immediately after the price increase After the Bitcoin Cash difficulty adjustment After the Bitcoin difficulty adjustment Relative prices Bitcoin 1. Implications for the Bitcoin network The above illustrates that the Bitcoin chain could experience block interval swings for longer periods than Bitcoin Cash, due to the longer difficulty adjustment window. Bitcoin Cash difficulty adjustment schemes designed to cause disruption There may be some small elements within the Bitcoin Cash community who wish to disrupt the Bitcoin network.

Share on. Platform Status. View Status Page. Crypto Trader Digest:. Sign-up to receive the latest articles delivered straight to your inbox. Sign-up here. In Bitcoin Magazine 's previous article on this topic, we explained why Bcash mining should normally not affect Bitcoin too much, aside from the incidental higher fees and slower confirmations.

We also explained why this dynamic could, in the meantime, ruin Bcash, as it should freeze that blockchain in its tracks. We also noted that Bcash has a built-in emergency solution to mitigate the risk, which could get its blockchain moving again. But this solution does assume either that some miners are choosing to act against their own short-term interest at certain times for the benefit of all miners — or that miners are coordinating for their mutual benefit, on some level.

Some miners are either acting against their short-term interests for specific periods of time — or they are coordinating to trigger the emergency solution. The good news for Bcash is that this means its blockchain is still in motion for now, at least on most days.

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If the value of the block rewards are higher and the difficulty is lower, miners make more money. The difficulty on both Bitcoin and Bcash self-adjusts each time blocks are mined.

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If it takes longer than two weeks to mine these blocks, difficulty adjusts downward so it becomes easier to mine. If it takes less than two weeks, the difficulty adjusts upward so it becomes harder. Bcash really needs its difficulty to be low enough to match the value of its block rewards in relation to Bitcoin.

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Otherwise, Bitcoin will be more profitable to mine, and miners will really have no reason ever to return to Bcash, leaving the Bcash blockchain frozen in its tracks. At some point, Bcash difficulty will exceed what its block reward will be worth, at which point all miners should leave. If in a space of at least twelve hours, fewer than six blocks are mined, the difficulty adjusts downwards by 20 percent for the next block. If miners coordinate or time this well, this can bring difficulty down by about 75 percent within a day. While triggering the EDA is preferable over a blockchain frozen in its tracks forever, it does present new problems.

Once difficulty is low enough, profit-maximizing miners are incentivized to jump on Bcash mining, producing an enormous number of blocks before difficulty adjusts within a day or two. In our previous article, we noted that this stop-and-go cycle is not ideal for users.

Examining BTC, BSV, BCH, and ETH Difficulty and Hashrate Trends

And there are a number of them…. First of all, this stop-and-go cycle actually causes a disturbance for Bitcoin users as well. Each time miners hop on Bcash, hash power leaves the Bitcoin network, which means that Bitcoin blocks are mined more slowly. And the fact that miners are intentionally gaming the system like this, suggests that the situation could drag on for a while: potentially weeks or months, and maybe even longer depending on how Bcash develops.