What on Earth is The Large-Scale Hash Power War?
Gu Long, a famous Chinese writer, said: ‘Where there are people, there are factions.’ Where there are factions, there are struggles. The larger the interests are, the more intense the struggles are. As the struggles escalate, wars break out. The Trojan War broke out for gaining the beauty of Helene. Aiming at the huge wealth of the Byzantine Empire, Ottoman Turks occupied Constantinople and destroyed the Byzantine Empire that had been very powerful for a period of time.
If the 2018 top ten news events of the blockchain industry are selected, I believe that the Bitcoin Cash (BCH) Fork Hash Power War held in November 2018 must be listed in the top ten. What is a hash power war? How on earth did the hash power war break out? What is the result of the war?
I. Fight for BCH
Let’s make clear the purpose from the very beginning, the hash power war mainly aimed to scramble for the future control of BCH. To understand the hash power war, we must first understand the key points of the war and what BCH is.
Probably the people who do not do the work related to BCH do not understand BCH. However, I guess all of you have heard of Bitcoin (BTC). Since Bitcoin was created by Satoshi Nakamoto in 2009, its credibility has constantly improved worldwide. Bitcoin, used to be regarded as an insignificant wretch by people, is gradually becoming more and more important. More and more platform organizations, transnational corporations, and even countries have been recognizing the value of Bitcoin and some people even call it ‘digital gold’. Bitcoin is the most successful application of blockchains, as it were.
Though BTC has been accepted by many people, its efficiency is very slow due to its own design. This shortcoming is a very severe problem, comparing it with its rivals such as credit cards. When a credit card or Ant Credit Pay is used as a means of payment, the relevant transaction is carried out instantly. However, when BTC is used as a means of payment, the transaction has a long-time delay. As more and more people use BTC, their transactions often cannot be confirmed within several hours. It is obviously too slow.
To improve the transaction efficiency and seek higher interests, BCH rises in response to the proper time and conditions with the help of some famous people and large BTC mine pools of the industry. Because the block capacity of BCH is larger than that of BTC, the transaction speed is faster when BCH is used. Some people believe that BCH is better than BTC. Here, we do not comment on it now.
It is worth mentioning that BCH is not generated from nothing and it is generated at a fork of the BTC development. The fork has been described in detail in a previous article Academic | Understand the Fork of Blockchain within 5 Minutes.
The popularity of BCH has been increasing since it was generated on August 1, 2017. Meanwhile, many mine pools and influential people of the industry endorsed the credibility of BCH. In the several months after the first generation of BCH, BCH gradually and steadily ranked the fourth in the field. The top three were Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP).
In this case, BCH is not only a gold egg, but also a hen that lays gold eggs. Because it is so important, of course everybody wants to gain it. The hash power war is just a scramble for BCH.
II. Hash power is military strength
After we understand the core of the hash power war, shall we describe how to fight in the hash power war and how to win the war? Besides, what is hash power?
Before we discuss hash power, we should make sure that we have understood an important concept — decentralization. Decentralization is the largest characteristic of the blockchain. In short, power is not rested in the hands of one person. Maybe it is difficult for people to understand ‘decentralization’. Now let’s look at several examples of decentralization.
Theoretically, an administrator of a bank with the relevant authority can arbitrarily freeze the accounts of the bank users. The largest problem brought by the above-mentioned examples is the trust problem. We believe that banks will not freeze our bank accounts arbitrarily and soldiers believe that their highest commander will make them win a war. But can we really trust them unconditionally? What if something goes wrong?
As for a large platform, obviously this is not a problem due to its large scale. As for small platforms, how can we reach a consensus if we cannot readily place trust in their administrators? The most worth praising characteristic of blockchains is that blockchains can find another mechanism to reach a consensus through decentralization. As for BTC and BCH, the mechanism is maintained depending on hash power. Therefore, a mastery of hash power is similar to a mastery of military strength.
The article entitled Hot Grin and Declining PoW has described hash power and mining. Here we just say one sentence about hash power, that is, Hash power refers to the capacity of a computer to generate hash collisions in one second, i.e. the capacity to mine or generate blocks. It does not matter if you cannot understand the definition. You may roughly regard hash power as the performance of a computer (a mining machine) and the credibility is not maintained by personal credits. Obviously, this understanding is very close to the ideal understanding.
The so-called hash power war is a war in which the two parties of the war try to use more powerful mining machines and generate more blocks within a certain period of time and the party that generates more blocks wins or one party directly attacks the chain of the other party so that it fails to normally generate blocks and then the party generates less blocks chooses to disappear or restart and let its follower build its own chain.
Take an easy-to-understand example. We must be familiar with the plays on the political struggles within royal families. If an old emperor died, the emperor had two sons and no prince was appointed to be the successor, how would the two brothers fight for the throne? The son with more supporters in the court and commonality will be the new emperor. The loser would admit defeat or establish another court based on the support of his supporters, declare that the other son of the emperor was not the real emperor, seize a part of the territory and await an opportunity to unify the country.
III. Two parties at war: Splitting of the capacity expansion supporters
Another key point of the hash power war: Who are the two parties at war and where do they differ?
The above has stated that BCH is derived from BTC. The main difference between the two is that the block capacity of BCH has been increased to 8M from the 1M block capacity of BTC. Here, we call the solution supporters ‘capacity expansion supporters’. They include Jihan Wu, founder of Bitmain (Antpool and BTC.com), Jiang Zhuoer, founder of BTC.TOP, Roger Ver and Craig Wright.
However, the good time did not last long. After they cooperated for over one year, the differences among the capacity expansion supporters became greater and greater due to some problems such as the concept problem, their dissatisfaction with one another constantly increased, troubles started among the capacity expansion supporters, and at last they started the hash power war.
The development team headed by Jihan Wu (hereinafter referred to as the ABC Combat Team) believes that the focus should make BCH support smart contracts and expand its functions rather than immediately expanding the capacity and bearing a potential risk.
The development team headed by Craig Wright (hereinafter referred to as the SV Combat Team) has a leftward opinion. The team believes that the planning of the ABC Combat Team has violated the initial intention of the peer-to-peer payment system created by Satoshi Nakamoto (developer of BTC and his real identity is unknown — the author) and the ABC Combat Team should have started the capacity expansion from November 2018.
Both the ABC Combat Team and the SV Combat Team are supported by mine pools and capitals. They have strong hash powers and they often quarrel. Jihan Wu denounced Craig Wright as ‘a mad man’ and ‘faked Satoshi Nakamoto”. However, Craig Wright was even more arrogant, and he claimed that he would let Jihan Wu ‘go bankrupt’ and ‘stay behind bars’.
Apparently, the contradiction between the two parties does not seem irreconcilable. The SV Combat Team wanted to expand the capacity and the ABC Combat Team did not oppose it. The difference was that the ABC Combat Team thought it unnecessary to expand the capacity immediately and it should be done later and slowly. In fact, the difference between the two parties was not irreconcilable. However, they have come to the last step, which indicated that obviously it was not just a technical concept problem and it must have some other underlying reasons.
IV. Final results
Finally, let’s look at the hash power war which is quite worth watching. What is the result?
In the beginning, there is not much difference between the BCH hash powers of the two parties. However, before the fork started, Jihan Wu integrated the hash powers of all his BTC mine pools, put them into the hash power war and made the strength of the reinforced ABC Combat Team increase greatly. The ABC Combat Team gained the upper hand in the hash power war and generated more blocks. However, the SV Combat Team did not admit defeat though it fell behind the ABC Combat Team and the SV Team still defended its chains, unless something unexpected happened.
Thus the BCH formally split. The party with more hash power headed by Jihan Wu controls the BCH ABC, which has been regarded as the winner by people, while the party headed by Craig Wright controls the BCH SV, it has chosen to conduct guerrilla warfare and it is continuing the game. Though the ABC Team has won, it does not have the strength to completely destroy the SV Team.
Before the hash power war started, the preparations for the war were conducted on a grand and spectacular scale. However, after the war, they have all chosen to shrink. Though they hate each other very much, to keep their assets is much more important, compared with their rages. As for the result, Roger, a man from the ABC Combat Team, told the truth — “It was a war in which nobody won and only who lost more heavily could be found.”
The credibility of BCH has been severely questioned by the people outside the industry after the hash power war. More people have found that it seems unreliable to maintain the security depending only on hash power.
To prevent the minority from controlling the chains, Trias has taken security and credibility as its vision and made the chains include only the nodes with very high credibility by using some methods such as the credibility calculation and the timely issuance of the top security list, which has greatly reduced the possibility that they can cooperate to do something wrong or evil. In addition, Trias has made an obvious improvement in the direction of resisting malicious attacks. Read the following article to know the detailed information about it.