Bitcoin SV, the controversial fork of Bitcoin Cash, is facing a serious issue related to its large block sizes. Recently, the blockchain underwent a reorganization—a synchronization problem that could potentially lead to an an attack. BitMEX Research originally noticed the problem, and it revealed the news via Twitter last Thursday.
Is It An Attack?
BitMEX says that Bitcoin SV has not experienced a double spend attack. It merely suggests that “one could infer” that Bitcoin SV’s block sizes are too large and that the coin is unreliable as a payment tool. Unfortunately for Bitcoin SV, its large blocks are its major feature—in fact, they are the reason that it exists in the first place.
Elsewhere, Zak Cole of WhiteBlock Blockchain Testing has discussed the possibility of an attack on Bitcoin SV. He explains that blockchain reorganizations reduce the amount of hashing power that is required to commit an attack. Cole concludes that the reorganization is “not an attack,” but that an attack is “definitely a possibility” for a clever attacker.
Some have previously suggested that a 51% attack on Bitcoin SV would be “relatively easy” to carry out due to falling hashrates. BitMEX itself has previously shown that Bitcoin SV mining profits are falling. These facts could respectively provide the opportunity and the motivation for an attack, to say nothing of other recent controversies.
It must be noted that a previous reorganization occurred on Bitcoin SV shortly after it was created last November. This was, however, due to a planned stress test that was improperly executed, not an attack. Still, many critics argue that large block sizes are a serious security risk, and many say that this problem cannot be solved with current technology.
Comparing the ETC Attack
A similar problem occurred on the Ethereum Classic blockchain in January, when a deep reorganization occurred and was later shown to be an attack. Ethereum Classic nevertheless survived. It more or less maintained its market position despite the fact that some believed the event would be a death blow for the coin.
However, Ethereum Classic had the cooperation of exchanges and analytics firms, which mitigated the issue and continued to list the coin in the aftermath. By contrast, Bitcoin SV is facing widespread delistings from exchanges, which are opposing Bitcoin SV leader Craig S. Wright for filing lawsuits against members of the crypto community.
In the end, exchanges that were previously on the fence about Bitcoin SV may decide to delist the coin if they decide it is a risk for themselves or their customers. This is much more likely if an attack actually takes place, but possible even if the risk is merely perceived. The full impact of the situation will be realized over the coming weeks.
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