By CCN: Coinbase researchers have released their own investigative findings into the recent Bitcoin Cash 51% attack controversy, and their conclusions might upset many Bitcoin maximalists.
When Bitcoin Cash came under attack during a scheduled hardfork in mid-May, a group of miners colluded to reverse the attacked blocks and return misappropriated funds to their rightful owners.
The Bitcoin Cash camp came under heavy fire for this move by BTC supporters. But Friday’s blog post by Coinbase suggests the global cryptocurrency platform ultimately saw good sense in the decision.
BITCOIN CASH 51% ATTACK: WHY IT MATTERS
The Bitcoin Cash upgrade was halted temporarily in early May when an attacker exploited a bug in the blockchain, a refresher can be found here. The attack lasted for a short while before a majority of BCH miners decided something fishy was afoot and took steps to address it.
Binance Graciously Decides Not to Nuke the Bitcoin Blockchain
By CCN: Binance CEO Changpeng Zhao discussed the idea of potentially reorganizing the Bitcoin blockchain. In this vision, the 7,000 BTC recently stolen from the cryptocurrency exchange would be…
Here we have one of those points where the rubber meets the road in
the crypto world. Blockchains are supposed to be immutable, but if enough miners agree to make a change, it can happen. In this instance, the maxim ‘code is law’ gets murky. After all, blockchains were designed to be malleable by the agreement of its users.
Others have made similar moves in the past – the reason we have Ethereum Classic (ETC) is because the Ethereum community split in two after a contentious hardfork in the wake of the DAO attack.
COINBASE: BCH MINERS DID THE RIGHT THING
Coinbase had their own interest in finding out what happened during the hardfork/attack, as BCH is major asset hosted on their platform. From the blog:
“On May 15th, Coinbase detected a depth-2 chain reorganization on the Bitcoin Cash blockchain. The reorg targeted BCH funds that were erroneously sent to BTC segwit addresses…”
Those funds totaled 3,655 BCH – equivalent to $1.4 million at the time. Most of these coins were safely recovered, and sent to their proper addresses by the BCH miners. This, it seems, was much appreciated by Coinbase. From the blog:
“We find it remarkable that BTC.top derived the technical solution to recover BCH funds mistakenly lost by users, choosing to send the coins to their intended recipients rather than claiming the funds for themselves.”
It was precisely because a less ethical miner attempted to move the stolen funds to their own address that BTC.top stepped in. BTC.top is one of the major Bitcoin Cash mining pools, representing around 10% of the BCH hashrate.
Some still maintain BCH miners neglected the principles of the blockchain in their recovery of the stolen funds. This combustible Reddit thread offers a taste of the opposing views represented by both camps.
Cryptocurrency Bitcoin Cash (BCH/USD) is trading at 340. Cryptocurrency quotes are trading above the moving average with a period of 55. This indicates a bullish trend on Bitcoin Cash. At the moment, cryptocurrency quotes are moving near the middle border of the Bollinger Bands indicator stripes.
Bitcoin Cash (BCH/USD) forecast and analysis on January 24, 2020
As part of the Bitcoin Cash forecast, a test of level 324 is expected. Where can we expect an attempt to continue the growth of BCH/USD and the further development of an upward trend. The purpose of this movement is the area near the level of 400. The conservative area for buying Bitcoin Cash is located near the lower border of the Bollinger Bands indicator strip at 322.
Cancellation of the option to continue the growth of the Bitcoin Cash rate will be a breakdown of the lower border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair below the area of 270. This will indicate a change in the current trend in favor of the bearish for BCH/USD. In case of breakdown of the upper border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.
Bitcoin Cash (BCH/USD) forecast and analysis on January 24, 2020 implies a test level of 324. Further growth is expected to continue to the area above level 400. The conservative buying area is located near area 322. The breakdown of the growth option for cryptocurrency will be the breakdown of level 270. In this case, we should expect a further fall.
Alexander Vinnik, the alleged operator of the BTC-e exchange, will be extradited to France following a ruling by Greece’s supreme court.
Vinnik will be sent to France on allegations of money laundering following a ruling from Greece’s Council of State, the country’s supreme administrative court, reported Greek news outlet Ekathimerini on Thursday. He was arrested in July 2017 by Greek authorities after Russia, the U.S. and France all issued international arrest warrants on charges of laundering at least $4 billion through BTC-e, which he allegedly set up.
Vinnik has maintained he is innocent of all charges, claiming he was just one of the exchange’s employees.
The court ruled that a decision by Greek justice minister Constantinos Tsiaras to extradite Vinnik to France, then the U.S. and
then to Russia had been lawful. Vinnik, who previously said he wished to be tried in Russia, has been on a hunger strike for the past month over claims his human rights had been violated.
A Greek court had initially ordered Vinnik’s extradition to France in 2018, where he is wanted on charges of cybercrime, money laundering, membership in a criminal organization and extortion. Thursday’s ruling from the Council of State, Greece’s supreme administrative court, means Vinnik will no longer be able to appeal the extradition ruling.
The Greek government turned down a request from Russia’s Prosecutor General for Vinnik to be extradited directly to the country in late December. Russian president Vladimir Putin had reportedly raised the issue with the then Greek prime minister Alexis Tsipiras in December 2018, according to Russian media.
A group of bitcoin cash miners is preparing a soft fork to redirect some of the block rewards into a new zcash-style development fund.
In a Medium post Wednesday, Jiang Zhuoer, CEO of mining pool BTC.TOP, said that a group of some of the largest bitcoin cash mining pools were preparing to soft fork the network to implement a “short-term donation plan” that would cut block rewards by 12.5 percent in order to fund network development.
“Investment in software and commons is crucial to secure a bright future for Bitcoin Cash,” the post reads, arguing that neglect can have a “damaging” effect on the network. “We can avoid these problems by providing an adequate level of stable funding, allowing Bitcoin Cash to thrive and succeed.”
Signed by Jihan Wu of Antpool/BTC.com, Roger Ver from Bitcoin.com and ViaBTC’s Haipo Yang, Zhuoer’s post argues there are “significant problems” with the current funding mechanism. Donations are made on a voluntary basis, making it difficult to finance long-term projects and giving corporate donors “an undue influence” over developers.
Many community members, Zhuoer writes, don’t currently contribute anything at all, creating a “tragedy of the commons” situation where the self-interest of individuals is contrary to the common good of the network. It may be controversial, but redirecting block rewards is “undoubtedly a far better solution” than the current funding system, the post reads.
Many of the same miners included in the post had previously pushed to introduce a “development tax” during a CoinGeek BCH conference back in 2018. A report by crypto investment firm Electric Capital found bitcoin cash lost more than 30 percent of its developers between December 2018 and June 2019, the largest drop of any major blockchain network.
Because bitcoin cash uses the same SHA-256 hash algorithm as bitcoin, most of the block reward costs will, according to the post, be carried by the dominant bitcoin miners, who constitute approximately 97 percent of the hash ecosystem. Assuming bitcoin cash stays at around $300, Zhuoer calculates the new mechanism could raise more than $6 million in
“It’s a clever proposal, with good intent,” tweeted Emin Gun Sirer, adding that a marginally lower hashrate for steady developer funding was a good trade-off as “empirically more attacks have been due to underfunded devs than to malicious hashrate.”
But the proposal is not without controversy. Zhuoer’s post says BCH blocks that don’t follow the soft fork “will be orphaned,” meaning they won’t be accepted by the five mining pools and risk not receiving any block reward whatsoever.
Funds will also be directed into an unnamed “Hong Kong corporation” that will coordinate and pay for network development. It’s not certain whether this new corporation will pay third-party developers or if it will do most of the work itself, like the Electric Coin Company (ECC) on zcash.
In an ask-me-anything (AMA) Reddit session Thursday, Zhuoer clarified that miners would “ensure the transparency and effective use of all funds” by the Hong Kong corporation. Antpool’s Wu added in the same AMA that many of the details for how the corporation would be governed and how development projects would be prioritized were still “under discussion.”
“There are many underspecified aspects to the proposal,” Sirer said. “Specifically, who will manage the collected funds and how will they be distributed?” That the proposal was sprung on members of the BCH community “was terrible PR and community management,” he continued, while the threat of orphaning dissenting blocks risks alienating much of the mining community.
It’s also disputed whether the five mining pools will be able to force the community to accept their soft fork. At press time, the signatories had a combined BCH hashrate of just under 28 percent, way below the required majority needed to push the soft fork through by themselves.
“They can’t enforce this coercive soft fork unless they come up with a lot more hashrate. And it would likely lead to many forks,” tweeted Charlie Lee, creator of litecoin. “Adding such a centralizing feature in this coercive manner sets such a bad precedent.”