Why is Bitcoin Price Rising. The Answer May Not Be What You Think.

Greater adoption especially in Japan. True.
Higher prices leading to greater interest and media hype. True.
Large investors and hedge funds investing. Also True.
More people trust the Core developers. Perhaps True.
Segwit is locked in and will activate soon. Maybe True.

But what if the people in control allow it !?

So who are these people in control? They are the people who simply by their action will affect the price. No, not the market manipulators as their desired results are not guaranteed and effect only temporary. No not the developers or even users. I am talking about the people in control of the hashing (mining) power, and by their action supporting or withdrawing their hashing, affects the success or failure of a chain.

For the first time in Bitcoin history. if the miners withdraw their mining power from mining BTC, transactions on the BTC chain will grind to a halt. ( See Chain Death Spiral ) Block confirmation time will be exceeding long and user experience so bad that BTC's price will collapse. Just the announcement that they will do so is enough to affect the price negatively.

So why have they not done so before? Well, prior to the fork, they will only hurt themselves as they mine and hold BTC. Today they have another option. When this strategy plays out, their plan will make them all the money that they have dreamed about.

Some of the miners with about 40 percent of the mining power have fought a very bitter battle for big blocks over several years. It was a very nasty, very open spat with both sides spewing verbal diarrhea on social media. This will not be settled by just a simple agreement and bear in mind that none of the Core developers were present or signed the NYA agreement.

We hear justifications like :

• Miners mine the most profitable coin. True, but this is economic action not strategy.
• Miners will honor their agreement. Money talks. Everything else is just noise.
• Segwit and BTC is better technology. Better technology does not always win. 

Core developers are not the same as the army of programmers and developers pulling for Segwit and Side chains and Lightning. I cannot fault their passion, zeal and dedication. However they are just being used to push an agenda.

Core developers do not want Segwit2X and have openly said so even coding to exclude Segwit2X transactions. They did not expect the BCH fork, but even so, are perfectly happy with BTC as it is, even if it loses to the other chain. There will be no Segwit2X. Simply put there are no developers for Segwit2X. Core developers will not be coding for Segwit2X.

The Big Reveal.

This is the Rich List as at 13 August 2017. The numbers may not be 100% accurate but they do paint an unmistakable picture.
                                                      BTC      BCH                        BTC            BCH
                     10000 - 1000000     121         121                        3011886      3310777     +298891
                     1000  -  10000         1666       1688           +22     3544974      3635319      - 90345
                     100   -   1000           16594     16160        -434     3840815      3726874     -113941
                     10   -     100             129880   122874    -7006     4344270      4183607     -160663
                     1   -       10               464743   424298   -40445    1277766      1163236     -114530

Most of the BCH coins about 300K have been gobbled up by the top bracket of 121 addresses. If BCH and BTC flips at current valuation, it will mean a windfall of just over 1 Billion dollars now. When this finally plays out, it will make the "Big Short" look like a pauper's picnic.

All the rhetoric encouraging BTC owners to sell their BCH for BTC, and media hype pushing up BTC price helps their strategy, without them lifting a finger. All that is left to do is switch the chain when they are right and ready. Don't get caught on the losing side.

P/S Please share. Help your fellow bitcoiners get the best information before they make the investment of their future. Fear Of Missing Out especially now can lead to unwitting mistakes and losses.

Update 15 August 2017

                          BTC      BCH       TOT        BTC     BCH         BTC       BCH         BTC
                           ( Hash Power )                   ( Difficulty)           ( Block Time )    (mempool)
31 July                 6163                                    860                    
1 August              6440     1525      7965         860        860        9.66        160              5
2 August              6433      378                        860        860        9.47        205              5
3 August              5931      447                        860        860      10.43          41            10
4 August              7749      216       7965         860        225        8.04          75            23
5 August              7473      143       7617         860        225        8.13        110              5
6 August              6023      499       6612         860        114       10.28         22              3
7 August              6637      551       7188         860        114         9.41         18            33    
8 August              6835      154       6989         923        115         8.78         62            35
9 August              6200      541       6741         923        115       10.43         15            43
10 August            6165      576       6741         923        115       10.74         14            42
11 August            6600      338       6938         923        115       10.00         21            55
12 August            6199      416       6615         923        115       10.66         20            15
13 August            6808      440       7248         923        115         9.73         18.46       27
14 August            5951      522       6473         923        115        11.07        15.82       47

Floating                                           1492

14 August - Hash Power on BTC reduced to 5951 PH and increased on BCH to 522 PH. The BTC chain is starting to slow, with mempool at 47MB and Blocktime 11.07 minutes. It will be interesting to see if the hash power increases tomorrow.

The amount of 1492 PH in red is the difference (7965 - 6473) between the highest recorded and today. That amount of hash power exist but is not on the network. Somebody controls it. Watch what they do with it. BCH price is rising (0.072) as the BCT chain gets slower. Let us watch as BCH retake its' position as the Real Bitcoin. More To Come. Keep Sharing.

Bitcoin Fork - Smoke Mirrors and A Game Of Poker

In this article I present the facts as I see them and leave it to you to reach your own conclusions. My opinions are my own and I encourage you to do your own due diligence. I could be wrong. It is your hard earned money.

Rehashing and analysing the figures over the period of the fork it is clear now that Bitcoin Cash had a difficult birth. Looking back I am convince that it would have been highly unlikely to succeed. I think what eventually happened was planned and executed by persons unknown who clearly wanted Bitcoin Cash to succeed. The key is to analyse the available hash power and look at how it was applied.

Refer here to Jimmy Song's article on how the Emergency Difficulty Adjuster (EDA) kicked in. Before it can be activated at least 12 blocks must be mined! ( The UAHF specifications. Starting block 478557.)

The First 12 Blocks
                                                     ( Approximate Time Lapse between blocks)
August 1st 2017   AM  8:16:14
August 1st 2017   PM   1:12:41     4 hours 56 mins
August 1st 2017   PM   1:33:06                  21 mins
August 1st 2017   PM   1:37:19                    4 mins
August 1st 2017   PM   1:52:58                  15 mins
August 1st 2017   PM   2:37:44                  44 mins
August 1st 2017   PM   4:05:15      1 hour  28 mins
August 1st 2017   PM   4:35:44                   30 mins
August 1st 2017   PM   4:39:21                     4 mins
August 1st 2017   PM   6:38:29      1 hour   59 mins
August 1st 2017   PM   8:07:01      1 hour   29 mins
August 1st 2017   PM   9:51:49      1 hour   44 mins
August 1st 2017   PM  10:15:01                  23 mins

Looking at the figures I would say roughly there was about 1 hour between blocks. At the same difficulty of BTC's 6500 Peta Hashes producing 10 minute blocks, we will need at least 1/6 the hashing power to produce 1 hour blocks. That is about 1200 Peta Hashes.

                             BTC     BCH    TOT           BTC     BCH         BTC       BCH         BTC
                               ( Hash Power )                 ( Difficulty)           ( Block Time )    (mempool)

31 July                 6163                                     860                        
1 August              6440      1525      7965         860        860           9.66         160              5
2 August              6433       378                        860        860           9.47         205              5
3 August              5931       447                        860        860         10.43           41            10
4 August              7749       216       7965         860        225           8.04           75            23
5 August              7473       143       7617         860        225           8.13         110              5
6 August              6023       499       6612         860        114          10.28          22              3
7 August              6637       551       7188         860        114            9.41          18            33        
8 August              6835       154       6989         923        115            8.78          62            35
9 August              6200       541       6741         923        115          10.43          15            43
10 August            6165       576       6741         923        115          10.74          14            42
11 August            6600       338       6938         923        115          10.00          21            55


Prior to 1 August the highest amount of hash power recorded was on 24 July at 7118 Peta Hashes. This is roughly 1000 PH over total hash power on 31 July. We can therefore be sure that at least this amount of hashing power was available and at least 678PH was "floating" and withheld from the system. The maximum hash power ever applied to the BTC and BCH chains was 7965 PH in total on 4 August.

We know we need at least 1200 PH mining on the BCH chain on 1 August to find the first 12 blocks. From the above table we can see in red that there was at least 1500 PH available and I believe this was directed to mine the BCH chain. Without this input, it would have taken about 3 days to mine the first 12 blocks and the BCH chain would have been a failure.

The Morning After

Once EDA kicked in, the BCH chain is assured of survival. The next objective is to get the block time down to 10 minutes and profitable mining as soon as possible. Or is it? Hashing power was taken off BCH chain on the 4 and 5 August to trigger the 6 blocks difficulty reductions and again on 8th August for 1 additional reduction The BCH chain was left at 15 minutes about 4 blocks every hour.

In addition on 4 and 5 of August about 7500 PH of hashing power was applied to the BTC chain. Was this done to push up the next difficulty adjustment to 923G on 8 August and possibly higher at the next difficulty adjustment? (Bitcoin Wisdom)

This "floating" 1500 PH was withdrawn on 6 August. As of 11 August there is still at least 1200 PH of hashing power "floating" and withheld from the system. So who is this mystery miner or miners? What is their intention ?

The Aftermath

We can see that on 9 August about 600 PH was withdrawn from the BTC chain pushing the block time above 10 minutes. The result is that the BTC chain is clogging up with low fee transactions and the mempool has already reached 57MB. Only those willing to pay high fees can get their transactions processed. Unless there is a fast injection of mining power this chain is in trouble! It does not have the protection of EDA and the Chain Death Spiral can easily set in if not already started.

Voila as if by magic, today, 11 August 500 PH was returned to mining the BTC chain and 250PH was taken off the BCH chain. This still leaves about 1000PH still "floating".

Over the whole of this period BTC stayed above $3200 and went above $3500 yesterday and $3700 today. All of Bitcoin mainstream was celebrating, attributing it to CORE and Segwit.

I believe that this celebration is premature. BTC rise could be the result of world tensions in regards to the USA and North Korea, a worsening global economy and gold not making any impact, The situation must be bad enough for investors to just ignore and overlook BTC's vulnerability. Currently BCH, which I believe to be the real Bitcoin, is selling at a bargain.

Beware Smoke And Mirrors

There is much going on behind the scenes. Nothing is what it appears. Hashing power is being used to influence and manipulate the market. The high BTC price is great for those wanting to sell their BTC and accumulate BCH. This will result in a major wealth transfer from those holding BTC to those holding BCH. I believe that the true Bitcoin will flip from BTC to BCH but that is just my opinion.

A Great Game Of Poker

In this game, very few people are showing their hand. The Bitcoin whales have gone into deep dive and have not been seen or heard from since the chain fork. When the time comes to show their hands there will be winners and losers. I think that the unexpected rise and strength of BTC price is a complication but it will not change the "game plan".

I can only present the facts as I see them and the conclusion I draw are my own. You could easily form a different opinion looking at the same facts but that is your right. In the end when the tide goes out we can all see who is without clothes.

In this environment I am guided by principles. The reality in Bitcoin is that there is no Government to rule and favour any faction or group. It is nature at its' purest. Only the strong survive and any weakness is punished. I believe in its' current form BTC has a vulnerability (No EDA) and that will lead to its' demise. Three months is a long time in crypto.

Related Articles

Chain Death Spiral - Here

BTC is Dead - Long Live BTC - Here

BTC is Dead - Long Live BTC Updated and Explained ELI5 - Here

Chain Death Spiral - A Fatal Bitcoin Vulnerability

Back in Bitcoin history, when Argentinian millionaire Wences Caseres ( Xapo, Paypal) came across Bitcoin he saw it as a potential solution to the periodic financial turmoil that totally wipes off the wealth of hard working Argentinians. In what I consider a very prudent act of due diligence, he paid a couple of hackers a sizable amount of money to hack and break the fledgling Bitcoin. Their conclusion was that it was unbreakable and that has remained true until today. The Bitcoin protocol has never been hacked. The vulnerabilities were the trusted infrastructure around it like the exchanges. The most memorable being MT Gox.

However on the 1st August 2017, Bitcoin main chain forked and a new coin Bitcoin Cash (BCH) came into existence. Some argue that it is closer to Satoshi's vision than the current Bitcoin (BTC) which separate the data portion from the address portion of the data structure. BTC became the main coin because it was supported by the majority of users, developers, Bitcoin businesses and miners in what is now knows as the New York Agreement.

Chain Death Spiral. (CDS)
After Bitcoin fork on 1 August it became obvious that Bitcoin the protocol did have an inherent vulnerability. This was that if the chain loses mining power it will have to wait a full 2016 blocks before the difficulty can be adjusted to bring the block time back to the normal 10 minutes. This vulnerability was never considered or analysed because until now the miners had no choice but to keep mining on the Bitcoin chain. After the fork however, the whole landscape has changed. Miners have a choice and power to influence the fate of the chain they are mining on.

This was brought clearly into focus when the blocktime of the BCH fork went as high as 15 hours per block in the beginning. BCH however was designed with Emergency Difficulty Adjustment (EDA) which adjusted the difficulty even before the 2016 block adjustment period is up. Bitcoin (BTC) does not have this safety feature and cannot have one unless a hardfork is performed to include it.

A Chain Death Spiral occurs when the block time increases leading to some miners switching chain. As more miners leave the problem gets worse and a feedback loop results in the dreaded Chain Death Spiral.

Bitcoin (BTC) mempool been increasing since after the fork on 1st August. It is currently 52MB which means it will take 52 blocks to clear without any additional transactions. The record was in May 2017 when it reached 120MB. The whole community was in an uproar resulting in a move towards other competing coins for transacting.

Looking at the hashrate distribution and starting from the 6th August we get the following


    (Peta Hash)         BTC         BCH       TOTAL  (Block Time)  BTC       BCH

6 August 2017        7473         143            7617                           8.13         110
7 August 2017        6023         499            6612                         10.28           22.15
8 August 2017        6637         551            7188                           9.41           18.46                    
9 August 2017        6835         154            6989                           8.78           62
10 August 2017      6200         541            6741                          10.43          15


A picture is forming. Between 8 to 10 August roughly 400 petahashes moved out of BCH which triggered the EDA adjustments then move back in. In addition there was a loss of 200 Peta Hashes on the 9th August and a further 200 Peta Hashes loss on the 10th August.

The current BTC mempool is 50MB and blocktime is 10.28 minutes. There is clearly a development and it will get clearer today. Will the 400 Peta Hashes leave BCH again or will the hashing power on BTC decrease further. What happened to the 400 Peta Hashes missing since 8th August. The BTC chain cannot afford further loss of hashing power. Its' blocktime must come back to within 10 minutes and soon.

What is certain is that the current price of BTC is not justified with this inherent vulnerability, risk of the dreaded Chain Death Spiral. Have investors totally abandoned any thought of immutable economic security and due diligence? It is incredible how we lose sight of the risks when we bamboozled with riches, hype and misinformation through censorship.

It is other peoples' hard earned money and other peoples' investments. Even the possibility that this "black swan event" can happen must be addressed. It should never be censored speech.

Related Articles

BTC is Dead - Long Live BTC - Here

BTC is Dead - Long Live BTC Updated and Explained ELI5 - Here

Why is Bitcoin Price Rising - It May Not Be What You Think - Here

Bitcoin Fork - Smoke. Mirrors and a good game of Poker - Here

Bitcoin Cash Will regain the mantle to be Bitcoin - Here

Intelligent Comments

from coinsinspace via /r/Bitcoin sent 37 minutes ago

It's a textbook black swan because majority dismisses it automatically as impossible, yet it's unlikely but possible, and it would be very likely fatal.

If bitcoin was the only viable sha256 coin that would be a much smaller danger. In that case the mining power would have to completely disappear for long. It's much more likely if miners can switch, especially if the other chain is more profitable.

Once that happens there are several factors all accelerating the problem:
(1) Mining rewards can only be spent after 100 blocks. Normally that's about 17 hours. If 90% of mining power disappeared that would take a week. So that's a strong incentive to mine something else (if available) in itself.
(2) Bitcoin economy grinds to a halt, as transactions become increasingly impossible. This leads many people with coins on exchanges to buy other coins just to be able to transact, which lowers the price, making the alternative chain even more attractive for miners.

Which means that, as miners leave, the higher incentive the remaining miners have to also leave. In the event that almost all miners leave the difficulty reset never happens as chain dies.

BTC Is Dead, Long Live BTC - Updated and Explained ELI5

I asked to be proven wrong but sadly nobody did. Blinded by the rise in price of both BTC and BCH nobody cared enough to look back to take stock. Let me explain as clearly as I can.

1) Mining Difficulty Adjustment.

Bitcoin mining recalculates and adjust the mining difficulty so that it produces a block every 10 minutes on average. This recalculation and adjustment is done after every 2016 blocks. Approximately every 13 days.


2) What happens if there is a sudden drop of hashing power?

Imagine that we have 10 computers contributing computing power to solve a problem every 10 minutes. If 1 of the computer fails then the problem will be solved every 11 minutes because there are only 9 computers working on the problem.

If there is a catastrophic failure such as 9 computers failing then it would take at least 100 minutes for the remaining computer to solve the problem. This was the situation when BCH forked, where it took from 12 to 15 hours in the beginning to find a block instead of the expected 10 minutes. Fortunately for BCH the developers knew of this problem and built in an Emergency Difficulty Adjustment (EDA) which adjusted the difficulty down by 20% if less than 6 blocks were found in the last 12 hours.

3) How does a loss in mining power affect the current situation?

Before the fork
Block times would get longer but after 2016 blocks the difficulty will adjust and block time will get back to the normal 10 minutes.  Miners will keep mining BTC because their equipment can only work on this coin. They will continue mining until their equipment is no longer profitable. They don't have a choice.

After the fork
The miners now have a choice. Should they be mining BTC or BCH and we can assume that they will make this profitability calculation and decision everyday. So the miners will be keeping an eye on the price, difficulty and transaction fees. At 3300 dollars for BTC and 300 dollars for BCH it is just about 55%  more profitable to mine BTC.  Mining profitability of BCH is getting close to BTC and can flip any time, especially with the enormous potential for BCH price to approach BTC.

If BCH is less profitable, why are any miners mining on that chain?

Well, for every chain there are miners who mine at a loss because they want to support the chain or they believe that the coins will be worth more in the future. These are the supporter miners and they exist on both chains.

Now what if there is a drop in mining power because some miners decide to switch chain for whatever reason or if there is a power failure ( hydro dam goes dry or fire at power plant taking it out for several months) that wipes off 10%  of mining power on that chain.

If it happens on the BCH chain, EDA will kick in and readjust the difficulty downwards by 20% to arrive at the targeted 10 minutes block time. In addition to EDA, BCH also allows up to 8MB blocks, which means that the transactions in the mempool can be cleared at the rate of 8MB per block if necessary.

If it happens on the BTC chain, there is no EDA built in, so block time will get longer than 10 minutes. How much longer depends on the amount of hashing power lost. It will have to complete the whole 2016 blocks cycle before the difficulty can be readjusted to bring the block time back to 10 minutes. Instead of 13 days to readjustment it could take much longer. If the block time gets to 20 minutes it could take about a month before the difficulty is readjusted. This increase in block time affects the mining profitability. At the same time the transactions in the mempool are backing up and users will be getting increasingly frustrated with long confirmation times and high fees because of competition to get into the next block, and only 1MB of the mempool can be cleared at a time. ( At time of writing BTC mempool is 45MB ) This decrease in the profitability of mining may cause miners to switch to mining on the BCH chain because they now have this option. As more miners leave the problem gets worse and this can result in the dreaded Chain Death Spiral.

That can never happen? Well if the price of BCH goes up by another 300 dollars it will become more profitable to mine and miners will switch. This is real and not hypothetical. 600 dollars for BCH is not an unreachable figure. After all it is closer in design to the original Bitcoin.

Transaction fees

     On the BTC chain, transaction fees gets higher as competition to get into the block intensifies. Miners are happy to earn this extra revenue but users are not. We can say that the BTC chain is elitist and only those who can afford the fees are welcome to use it. Those that can't or wont pay are encouraged to leave, and leave they will, perhaps for the BCH chain which is cheaper and faster.

On the BCH chain transaction fees are kept low because there is ample space in each block to accommodate all users. We can make an argument that if users don't have to pay a fee, they wont. However in reality the majority of users will pay and it appears that most people consider 5 cents to be a reasonable fee. Some are happy to pay more and some will pay less and in this way the BCH chain caters more for the masses. The rich don't mind subsidising their poorer cousins in India and Africa.

What about the lightning network where the users need only pay very small fees to use the network. Firstly the lightning network is not here yet. Secondly the miners don't get this fee and so will not be concern with the fees collected there.

Remember that more users means more value. This means that in the long run the BCH chain will gain users and grow value faster.

User Economics

Now we will switch to the investor point of view. A majority of users treat BTC and BCH as a store of value. Most are investing hoping that the value of their investment will increase over time.

Whether you can afford to invest 100 dollars or 1 million dollars it probably represents a significant part of your wealth and you want to invest it as wisely and as safely as you can.

So these are the questions you should ask

1) "Can miners leave the chain you want to invest on?" 
   
       The answer to both BTC and BCH is YES.

2) "What happens to the chain in question if miners leave?"
     
       The explanation is above. On the BCH chain nothing much. It will slow down awhile but will adjust and get back to normal. However on the BTC chain it is possible and not a non zero possibility, that the chain could come to a grinding halt and become unusable.

It is your hard earned money so the thought of it being subjected to loss, even if it is only a small chance, should sway you to the safer choice or not invest at all. If you are investing for your family and friends or your investors, the question of risk and safety becomes more acute as reputations and legal implications are involved.

3) What happens if you are already invested and you just found out about this existential risk?
   
        If it is your own money you could decide to accept the risk and remain invested. However if it is not your money then you have a legal duty of care. You have a fiduciary duty to make sure that the funds you are entrusted to look after are safe. You have been made aware of the risk, and even a small amount of known risk cannot be acceptable for you legally. If you are invested in BTC, you will be waking up everyday checking BCH prices, the mempool and difficulty and mining profitability, to see if any miners have or could possibly leave initiating the Chain Death Spiral.

If you are invested in BCH you have peace of mind because the dreaded Chain Death Spiral is not a possibility.

4) What would you do if you are heavily invested say hundreds of millions or billions and you decided that the risk is unacceptable and you need to get out?

If you had both BTC and BCH at the time of fork then your position is neutral.

If you have sold your BCH allocation or if you invested in BTC after the fork, it gets interesting. Because if you were to sell quickly you will crash the market. So you will need to do it slowly and at the same time keep the conditions as "normal" as possible until you exit completely. To do this you will have "manipulate" the market directly or through user forums, to keep the BTC price high and the BCH price low until you exit your positions.

Wonder why the BTC price is so high and bullish. It is not just because of demand and the selling of BCH to buy more BTC but those that did, now have a mission to keep BTC prices high with rosy predictions like 5000 and 25000 soon. They are now bias and invested in BTC price staying high. Be wary.

Conclusion

Do not be fooled. By now the people invested know what is happening. Before the fork it was hard to see. But now they can clearly see the implications and how events will unfold and play out. Some will see it before others. Some will take advantage of what they see to make a profit. Arm yourself with knowledge so as not to be caught at the wrong end of the stick.

There is a continuing competition for the services of miners to secure their chain. In this scenario the BTC chain always carries the possibility of going into a Chain Death Spiral. The BTC chain is doomed because it does not have the protection of EDA and the problem is magnified by the 1MB limitation. It is only a matter of When and not If.

How do you know if I am not favoring one side against the other?

I am telling it like it is. I am not comparing the technical merits of each technology or the capabilities of their developers. If the chain fails these merits do not matter one iota. The fact is one side, BCH has immunity against loss of hashing power. The other chain does not, When the "disease" hits, the chain without the immunity will get "sick" and can even die. When it does the chain that survives, BCH becomes the new "Bitcoin". This is the reality.

So why can't the developers of the BTC chain program in EDA or something similar?

It is a hard fork! And therefore not really in their control. It took nearly 4 years to get BCH to hard fork to bigger blocks and only really made possible because a soft fork UASF threaten to split the chain. The miners promised to support and not to attack the new BCH chain as insurance and security against UASF to which they were oppose. It is actually an unexpected bonus that the BCH chain has immunity against the dreaded Chain Death Spiral, and only because that protection was built in from the outset out of necessity.

If you are wondering why this was not a problem for ETH and ETC, it is because unlike Bitcoin, their mining difficulty is calculated and adjusted after every block.

Link to the previous article BTC is Dead, Long Live BTC

BTC is dead - Long live BTC.

On August 1 2017, after years of acrimonious and bitter infighting, Bitcoin Cash (BCH) was forked off of the original Bitcoin blockchain. It took quite a while to find the first block and a long time after for the second block. The reason for this was because of the low hashing (mining) power on the BCH blockchain. The BCH fork had to operate at the same mining difficulty as the main chain, at the time of the split, but with only a fraction of the hashing power. By design, the BCH fork had an Emergency Difficulty Adjustment (EDA) built in, because the developers had anticipated the reduced hashing power. EDA adjusted the mining difficulty on the BCH chain by a factor of 20% if less than 6 blocks were found in a period of 12 hours. This worked perfectly and as at time of writing the difficulty was reduced to about 17% of the main chain. Thanks to the new 8MB limit the next block promptly cleared out the whole mempool. The largest block found was about 4.6 MB. ( Clear That Mempool )

In his article ( Traders guide to Bitcoin Cash and Bitcoin Segwit ) Stein Ludvigsen pointed out that the BTC chain without the emergency difficulty adjustment is particularly vulnerable to slow block times from loss of hashing power. The BTC chain will have no protection against miner defections and will have to wait out the full 2016 blocks before the next difficulty adjustment. Depending on the block time this could stretch out months instead of the expected 13 days.

In his article ( Cashing out of Bitcoin ) John Milibit postulated that if the BTC chain were to lose mining power to the BCH chain, blocks on the BTC chain would get increasingly hard to find, block times would get longer, the BTC chain would get into a Chain Death Spiral and could come to a grinding halt. Furthermore, blocks found on the BTC chain can only clear the mempool at 1MB per block. This at a time when the mempool will be increasing because of all the transactions wanting urgently to get into the next block pushing fees sky high. The BTC chain will become unusable.

The Awful Truth

This now exposes the awful truth about the BTC chain which have been missed. With the BCH chain alive and well, the BTC chain is now totally dependent on miners' goodwill to continue mining, or the Chain Death Spiral will come into effect. Note the emphasis on dependent on miners' goodwill and less on mining economics. There is now another option for miners. They could leave because the BCH chain becomes more profitable to mine or for any other reason, and there are consequences for the BCT chain from their decision. Prior to the fork they could not leave. Now they have to be begged and persuaded to stay. For a rational investor, even the possibility that such a risk exist, makes the system untenable and unusable. We now realise, how important a role, the miners play. Their contribution should have been appreciated and they should have been listen to and given the respect they deserved. Not vilified and demonised. Who would have known?

What happens now?

The short of it is that no person or economic entity can accept or tolerate risks not within their control. They cannot place their financial well being at the goodwill and mercy of others. The Bitcoin system depends on pure greed and capitalism to function. Socialism, Communism, Dictatorship, Appeal to authority or Miners goodwill cannot work. BTC IS DEAD. LONG LIVE BTC.

Only a gentlemen cartel among investors, users and miners for a BTC hardfork to include EDA can save the current BTC chain. However cartels do not work in real life as the economic advantages to be the first to leave is too strong. In this Game Of Forks there is room for only one fork and BTC lost.

If you have not sold your BCH you will not be affected as BCH will become the new BTC. For the rest there are winners and losers. BTC will have no value. The war is ended, but not in any way we wished or planned. We must all now be magnanimous and humble as we pick up the pieces.

I HOPE I AM WRONG. PROVE ME WRONG. PLEASE.

If I am right, we should stop trading on all exchanges, to protect the innocent, for the good of the Bitcoin community.