Will Bitcoin Cash Be Forced to Hard Fork Its Proof of Work Algorithm?

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·@calaber24p·
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Will Bitcoin Cash Be Forced to Hard Fork Its Proof of Work Algorithm?
When bitcoin cash forked a few months ago, one of the biggest reasons for contention was that the developers decided to keep the current bitcoin algorithm, SHA 256, which means they would directly compete with hashpower on the main chain. The problem with this is, unlike most coins today, the difficulty adjustment for bitcoin and bitcoin cash is not every single block, but rather a large sum of blocks, which means if you suddenly lose a lot of hashpower, you could be sitting without blocks for hours.


Bitcoin cash did change the difficulty algorithm a bit to help this, but they did not change it nearly enough to actually make the impact they needed. Rather than the difficulty changing in a smaller amount of blocks, they made it so if there aren’t a certain amount of blocks in x amount of time, then the difficulty falls. This in theory was okay, but in action, it ends up being a failure. Even now the bitcoin cash blockchain has periods of long waiting times and 2-3 hour block times and then other periods where they have block times under a minute.

<center>https://crushthestreet.com/wp-content/uploads/2017/03/btcfrk-1.jpg</center>

This has caused the inflation rate of bitcoin cash to skyrocket much faster than intended and has in general flooded the market with many coins. Miners usually do what is the most profitable because they are businesses, so when the difficulty lowers , miners jump on the chain and mine a large amount and pump the difficulty back up. It has become a cycle and it really doesn’t look like it will change any time soon, the only remedy might be to change the difficulty adjustment or the proof of work algorithm all together.


The problem is changing either of those, would result in a second hard fork and things start to get distorted from there. If the community doesn’t agree on the hard fork , then you will have a split of two more coins and the community will be divided even further. The problem with hard forks is partly that everyone has a view of how bitcoin should be and most of the time, at least some amount of people support them, which means the community risks be fragmented into a bunch of different groups. 

<center>https://media.coindesk.com/uploads/2017/08/Screen-Shot-2017-08-23-at-9.40.13-AM.png</center>

Because there is no benevolent dictator who says “this is what goes”, groups are free to fork off and go after their own implementations. We might realize that in 5-10 years that this method might be ineffective if we have a bunch of different implementations, all just slightly different, competing for adoption. This doesn’t just hurt bitcoin, but all open source cryptos as well. Every coin eventually will face a problem like this. As for bitcoin cash, I think ultimately if they want to survive they will have to hard fork again, or figure out some way to deal with the difficulty gaming by miners.


<center>http://i.imgur.com/4u1EC27.png</center>
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