Re: Estranged Core Developer Gavin Andresen Finally Makes Sensible 2MB BIP Proposal!
However, when you have the major hash power supporting an upgrade, then the miners of the minority chain in a hard fork can not mine without suffering huge loss on the mining income (too slow mining), similar to the minority miners in a soft fork suffering huge loss when all the mined blocks are orphaned.So hash power will give up the minority chain quickly thus basically achieve the same result: After a few days, no one would be able to extend that old chain in any meaningful time. This has happened on that "50 bitcoin forever" fork during the first reward halving
This, of course, assumes that nodes reconcile and agree upon a single, valid ledger. Even if a majority of hashing power supports Hard Fork A and a minority supports the Original Fork, the relative hashing power of the minority increases by the amount of hashing power that is mining Hard Fork A, since they are building on separate blockchains. For example:
Pre-fork:
Minority = 30% hashing power Majority = 70% hashing power
Post-fork:
30% minority = 3.333x relative hashing power (Original Fork) 70% majority = 1.429x relative hashing power (Hard Fork A)
In a hard fork situation where there is a significant disparity between the proportion of nodes enforcing different rule sets, it becomes a game of speculation for miners to choose to increase their relative hashing power and by a factor of how much? And the only way to choose is to judge -- based on node proportion -- which blockchain is likely to store value against their mining expenditure?
It's gonna be fun to watch -- I'll tell ya that.
I guess the minority chain will be end very quick, if they dare to setup an exchange, they will face a sell off of pre-fork coins counted in millions of bitcoin, the price of that coin will be crash to 0 in a couple of minutes. In fact I guess no exchange dare to setup an exchange for a minority chain coin. The incentive to mine the minority chain will almost be 0
Why would you assume that? The most important thing to consider here is that miners are working off incomplete information. They don't really know how many nodes are running what implementation as it's very easy to run fake nodes. And it's nodes -- not hashing power -- that determine the validity of a blockchain. It's a more diverse and interesting question than most realize. Miners are pretty centralized. I think this is why Gavin is targeting them: it's much easier to trick a small number of highly centralized mining pools than it is to trick thousands of node operators. And if the 2MB implementation is capable of triggering the rule change based on hashing power (at 75% or whatever bullshit "democratic" threshold Gavin & Co. come up with -- 51%, etc.), then everyone else will crumble in submission, right?
Well...the dozen nodes that I run won't. The definition of "majority" and "minority" chain can change in a heartbeat; that's just a matter of miners temporarily pointing their hashing power at one chain or the other. It doesn't matter what Coinbase and Bitstamp say now, or where Bitfury points its hashing power. What really matters are the nodes that determine block validity, and what proportion of them enforce the new fork's consensus rules. Because if a significant proportion of them enforce the old rules, we will have an irreparable chain fork. These irrelevant musings about how a majority of hashing power will render all other blockchains instantly dead are amusing but not very informative. If nodes do not approach consensus, miners will have to choose which fork to built on top of. But, which one? All of the Classic/XT rhetoric says that a temporary majority of hashing power will surely solve everything. But what the hell does that have to do with nodes? What proof do you have that Classic nodes will comprise a majority of nodes -- simply because Bitfury and a few mining pools upgraded (if that happens at all)? Well, if a majority of nodes continue to enforce the 1MB rule, you may find quickly that the "majority chain" isn't a very meaningful phrase. It's all about validity. Miners will point their hashing power at the longest, valid chain. If it isn't clear which one is the longest valid chain (due to no clear consensus among nodes), we will have multiple blockchains and this will be irreconcilable. IMO, the most likely outcome of that is for mining farms to shut down en masse and for difficulty adjustment to drop significantly, as miners cannot risk expending resources to build on potentially invalid blockchains. The market would likely never recover -- probably rightfully so. For this to happen would mean that the only mechanism to enforce rules within the bitcoin protocol was broken, and all it took was the prodding of a loud minority.
By the way, you know that pre-fork coins could also be sold off on majority-fork exchanges? Particularly because early adopters might be a little pissed off at the commit keys for bitcoin's dominant implementation being in the hands of a junior dev who wants to make the question of inflating the money supply a democratic one (jtoomim). How do you know who controls millions of pre-fork coins? You can be sure that I'll be dumping everything the second Toomim gets the keys to the kingdom, and I know several likeminded people.