An executive in the prominent cryptocurrency investment firm claims that he doubts that bitcoin and bitcoin cash will be able to avoid the so-called bitcoin civil war assuming they maintain the same mining algorithm.
Since bitcoin cash launched in August, its advocates have elected a concerted push to brand getting the true heir to bitcoin’s original vision as a general peer-to-peer electronic cash system. As soon as the cancellation of SegWit2x a couple weeks ago, the bitcoin cash price surged to an all-time high while bitcoin entered a steep decline, shocking the area into the realization that bitcoin cash’s claims incorporate teeth.
Many influential figures, including both Andreas Antonopoulos and Jihan Wu, have cautioned the town to stray from framing the scaling debate as a general civil war. They imagine that the two cryptocurrencies have fundamentally different use cases and visions and may consequently coexist peacefully — as bitcoin has in the legions of other altcoins that may have launched year after year.
However, Ari Paul, chief investment officer at crypto-focused firm BlockTower Capital, stated on Twitter that he does not anticipate that bitcoin and bitcoin cash are able to coexist as “friendly differentiated currencies” assuming they are fighting a zero-sum battle for one limited resource which includes hashpower.
“The idea that BTC and BCH is often friendly differentiated currencies is nonsense,” he wrote. “PoW mining is among the key underpinnings of ‘trustless digital scarcity’, and it breaks if miners can attack a series and retain economic property value of their hardware.”
Currently, bitcoin and bitcoin cash share similar proof-of-work (PoW) SHA-256 hashing algorithm, e . g miners can easily switch back and forth between networks to mine whichever blockchain is one among the profitable at any moment. Paul states that this necessarily renders one of the several blockchains fundamentally insecure, preventing both the cryptocurrencies from ever reaching an armistice.
“Given that BTC and BCH are on same PoW algo, (at least) one is fundamentally insecure,” he explained. “We can have ceasefires amidst an extended ‘war’, but we’re in a state of disequilibrium. I expect the disequilibrium to persist for a little bit and make a lot of drama before ultimate PoW fork.”
Technically, this is of all altcoins that share a hashing algorithm with bitcoin, but few other mining-compatible coin poses as serious a menace to bitcoin’s viability. Paul warns that though they may currently coexist fine, the chain with increased ideological support from miners could eventually mount a panic attack against the lesser one, which means that its apparent security is a facade.
“You may leave a door unlocked for any year without a robbery,” he concluded, yet it “doesn’t prove security.”