Cartel manipulating mining difficulty?

[hatshepsut93]

This works well if mining Bcash is on the same scale of profitability as Bitcoin, which may or may not be the case, if we consider all the money Bitmain spent on pumping in as part of the spendings. Bitmain has to genuinely convince some critical mass of investors that Bcash is worth something, via both media and the market. If the price is high only because Ver and Jihan are buying it from their own pocket, than mining it for them isn't actually more profitable than mining Bitcoin. Also, there's a risk that people haven't sold their airdrop yet will just dump Bcash, I saw some people post here saying they haven't dumped yet because they are worried about their privacy. I guess we need a Bcash mixer.

[deisik]

Things are getting hotter with every hour passing



It seems like BCash hashrate is going to surpass the hashrate of regular Bitcoin with only 7 hours remaining till the difficulty adjustment. I don't know what's going to happen when there are more miners (hash power) mining Bitcoin Cash than the regular Bitcoin, but we may well be on the verge of a full scale war between the coins. Let's call it the attack of the clones (even if there is only one clone pretending to be a genuine Bitcoin)

[deisik]

Now rinse and repeat part seems to be coming along:



The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. And I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

[illyiller]

The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

We'll see if the hash rate floods back to BCH now. It looks like you were right. What do you think the long term effects of this manipulation will be?

I suppose it keeps BCH viable (as long as there is enough price support on exchanges, and in theory, Bitmain and Roger Ver could handle that). It also increases network congestion on the BTC chain, since overall hash rate is dropping (increasing average block generation time). Combined with spam attacks on the BTC chain, this could help the BCH narrative.

[deisik]

The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

We'll see if the hash rate floods back to BCH now. It looks like you were right. What do you think the long term effects of this manipulation will be?

In fact, it looks like we are already seeing the effects of this manipulation

The price of Litecoin surged over 15% within the last 24 hours (now it retracted a little but is still well over 50 dollars per coin). This is an obvious and immediate effect of people losing trust in Bitcoin (in any Bitcoin, for that matter). If this kind of manipulation is set to continue or even become worse, people will be leaving Bitcoin in favor of other coins. So don't get surprised if you wake up one morning and see the Litecoin price over 100 dollars per piece

[DooMAD]

Now rinse and repeat part seems to be coming along:



The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

If one is to believe the narrative, then it's conceivable you might interpret collusion.  But in the interests of balance (and common sense), would the more rational conclusion not be that it was simply a matter of the miners naturally following whatever was most profitable at any given time?  Or even playing the long-term angle and accumulating some block rewards now for something they calculate might increase in value in future?



Sure, there will probably be some bumps in the road because of this, but it's all part of demand and price discovery in a free and open market.  

I can see how conspiracies and the possibilities of potentially shady motives might seem more stimulating than boring market stuff, though.  Keep up the entertaining drama and watching from the sidelines.  If it keeps you distracted from having any real influence, it can only be a good thing.  

[deisik]

I can see how conspiracies and the possibilities of potentially shady motives might seem more stimulating than boring market stuff, though.  Keep up the entertaining drama and watching from the sidelines.  If it keeps you distracted from having any real influence, it can only be a good thing

Which conspiracy are you talking about?

Would creation of Bitcoin Cash count as one, a conspiracy of sorts? Indeed, miners are mining for profits, but that's what I've been always telling at every corner, so what's your point? I've always been telling as well that we should look at what miners (especially those miners who have a "controlling stake" in Bitcoin mining) do, not what they say or pretend to do. As an aside, I find it massively disingenuous that you first say that "it is conceivable you might interpret collusion", and then proceed as if I actually claimed conspiracy here. We see the effect and result, that's what counts in the end, and that's what I'm mostly talking about. The conspiracy part (if any) is there for fun only ("the cartel")

[matuson]

The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

We'll see if the hash rate floods back to BCH now. It looks like you were right. What do you think the long term effects of this manipulation will be?

In fact, it looks like we are already seeing the effects of this manipulation

The price of Litecoin surged over 15% within the last 24 hours (now it retracted a little but is still well over 50 dollars per coin). This is an obvious and immediate effect of people losing trust in Bitcoin (in any Bitcoin, for that matter). If this kind of manipulation is set to continue or even become worse, people will be leaving Bitcoin in favor of other coins. So don't get surprised if you wake up one morning and see the Litecoin price over 100 dollars per piece

I don't quite agree with you. The last 24 hours bitcoin price is constantly going up. Perhaps it was triggered by the growth of the other crypto currency. Actually all crypto currencies are still dependent on bitcoin and therefore I do not believe that it ever will be a bias towards altcoins.

[deisik]

The BCash mining difficulty was adjusted (increased) two days ago, so miners expectedly and quite naturally stopped mining this coin and moved their hashpower to mining regular Bitcoin. Then the mining difficulty got conveniently readjusted again (now decreased), and miners started mining BCash all over again. I'm utterly curious where you are, all the criticasters, who had been ridiculing this idea at first. Why did you put your tongue in your ass now?

We'll see if the hash rate floods back to BCH now. It looks like you were right. What do you think the long term effects of this manipulation will be?

In fact, it looks like we are already seeing the effects of this manipulation

The price of Litecoin surged over 15% within the last 24 hours (now it retracted a little but is still well over 50 dollars per coin). This is an obvious and immediate effect of people losing trust in Bitcoin (in any Bitcoin, for that matter). If this kind of manipulation is set to continue or even become worse, people will be leaving Bitcoin in favor of other coins. So don't get surprised if you wake up one morning and see the Litecoin price over 100 dollars per piece

I don't quite agree with you. The last 24 hours bitcoin price is constantly going up. Perhaps it was triggered by the growth of the other crypto currency. Actually all crypto currencies are still dependent on bitcoin and therefore I do not believe that it ever will be a bias towards altcoins.

What do you disagree with specifically?

You don't believe that Litecoin surged during the last 24 hours while it was pretty stagnant (in dollar terms) for the last month or so? If you don't believe me, Google is your friend. Anyway, this is a matter which is still in progress, and I'm just thinking (you can read that as speculating, if you please) what effect this kind of manipulation could potentially lead to in the long term (if it is set to continue). As to me, that would most likely lead to people losing their faith and trust in Bitcoin. But you may choose to disagree, of course

[DooMAD]

I can see how conspiracies and the possibilities of potentially shady motives might seem more stimulating than boring market stuff, though.  Keep up the entertaining drama and watching from the sidelines.  If it keeps you distracted from having any real influence, it can only be a good thing

Which conspiracy are you talking about?

Well, let's see... the clue might be in the title of your thread.  When people speculate over "who shot JFK", "were the moon landings faked" or "who did 9/11", it tends to involve conspiracy.  As is the case when you speculate over the existence of a mining cartel manipulating difficulty.

Would creation of Bitcoin Cash count as one, a conspiracy of sorts?

In your head, evidently.  In mine, not so much.  That comes down to perspective, I'm afraid.  Believe as you want.

Indeed, miners are mining for profits, but that's what I've been always telling at every corner, so what's your point?

That if they're mining for profit, it means they're not intentionally adjusting the difficulty as your OP alludes to.  It's just a natural consequence of them chasing the profit.  That means there's a distinct possibility it isn't manipulation at all.

and I'm just thinking (you can read that as speculating, if you please) to what effect this kind of manipulation could potentially lead to in the long term (if it is set to continue). As to me, that would most likely lead to people losing their faith and trust in Bitcoin.

If there was somehow a way to force the miners into mining what someone thought was best, that would be far more disconcerting than just letting them get on with it and do what they want.  My faith and trust in Bitcoin stems from the fact that everyone has just enough individual control that no one is in control overall.  That includes any miners following any chain they please at any time they please.  Bitcoin works best when everyone does whatever the hell they want.

[deisik]

Indeed, miners are mining for profits, but that's what I've been always telling at every corner, so what's your point?

That if they're mining for profit, it means they're not intentionally adjusting the difficulty as your OP alludes to.  It's just a natural consequence of them chasing the profit.  That means there's a distinct possibility it isn't manipulation at all

Oh, wait, I must be missing something here

So you say that it is not miners who created Bitcoin Cash which would allow them to earn from switching their hashpower from one coin to the other as soon as the mining difficulty readjusts. I understand (well, somewhat, though I certainly don't agree with that point) when people doubt that it is in fact miners who are spamming the network to fill up the mempool, thus prompting users to pay higher fees. After all, it is not miners who make users pay higher fees, they do it entirely on their own, right? But what about Bitcoin Cash?

[krishnapramod]

This extreme difficulty oscillations is damaging both to Bitcoin and BCH itself. Miners gaming on this are just looking at the small picture, short-term profit. If this oscillation goes on for a considerable period of time then it would be claustrophobic, price of either BTC or BCH would drop significantly.

Right now, BCH is just a pump and dump coin, no real usage, no merchant adoption, its value is entirely dependent on speculators and if miners keep gaming on difficulty then an accelerated BCH generation would lead to inflation and in turn dumping.

Bitcoin Cash developers are having a discussion on the difficulty drop consensus rule.

I think such a faster rate of coin generation is problematic as it would lead to faster halving(less than 2 years), which leads to faster rise of transaction fees. This leads to the very problem for which bitcoin cash was created to solve. Furthermore, faster generation of coins will also lead faster into unexplored lands of comparable transaction fees overcoming block reward incentive.

Don't know what they are more concerned about, faster halving with increased transaction fees or increased transaction fee overcoming block reward. Some suggestions put forward by developers are changing the algorithm, removing EDA, small block target.

https://github.com/Bitcoin-ABC/bitcoin-abc/issues/75

If this was intentional or not, apart from miners profiting, the whole switching cycle is damaging to both the coins.

[veins11]

A strange idea has occurred to me today

As far as I understand it, if the mining difficulty is too low and there is plenty of hashrate all of a sudden, the mining of new blocks won't be limited to just 6 blocks per hour (on average), right? If so, given the emergence of the mining cartel (controlled by Jihan and Bitmain), they could specifically "invent" Bitcoin Cash to manipulate mining difficulty, and thus mine more blocks on both chains than just 2 times more (more than 2×6=12 blocks). If there is not enough hashrate, say, in Bitcoin Cash (as was the case), the mining difficulty will go down, so the cartel will switch their miners to mining this coin. Then there is not enough hashrate left for Bitcoin, the difficulty readjusts soon thereafter, and miners switch back mining more bitcoins on the original blockchain than before



Then rinse, repeat

For the above two outfits mentioned, they would have to keep a lot of people quiet to pull it off. Conspiracies happen, but I think in this case any conspiracy to control bcc or btc mining, and the output (btc and bcc) would be some of the bigger players in bitcoin (the market movers).

Regarding hashrate, dfficulty and blocks mined, it depends on how much is thrown at bcc. If it is extremely competitive, like btc has been, the lower difficulty would not help, as the competition for a block is fierce. So blocks would be 10 minutes or longer regardless of the difficulty, and the biggest would win in most cases.

[darkangel11]

I think it's possible and easy to do. I'm fairly certain BCC is being manipulated by its wealthy supporters. They were hoping for it to take some of the bitcoins value after the fork and achieve a ratio close to 70-30, but it failed. BCC had less than 10% of BTC value and soon went down below 5%. We recently saw it gain value again and becoming profitable to mine. Coins like that with not much hash power allocated into it are easy to manipulate.

[deisik]

Regarding hashrate, dfficulty and blocks mined, it depends on how much is thrown at bcc. If it is extremely competitive, like btc has been, the lower difficulty would not help, as the competition for a block is fierce. So blocks would be 10 minutes or longer regardless of the difficulty, and the biggest would win in most cases.

I basically agree with you

But could anyone imagine just a few months ago that miners are going to pull off this trick? And they did just that, and now reap profits essentially raising their revenue above and beyond what simple mining rewards and high fees could potentially offer them. So when the profit potential of this trick is finally exhausted, they could come up with something entirely new. Or they could just split Bitcoin once again and create yet another Bitcoin Cash

[illyiller]

This extreme difficulty oscillations is damaging both to Bitcoin and BCH itself. Miners gaming on this are just looking at the small picture, short-term profit. If this oscillation goes on for a considerable period of time then it would be claustrophobic, price of either BTC or BCH would drop significantly.

We'll see. BTC hash rate dropped considerably, but it's continuing to rebound, with block time back to one every ~10.3 minutes. Meanwhile, BCH is still in a bullish pennant formation and BTC is making new highs as we speak. So, it's really tough to say what will happen. There's a lot of money rushing into this market, so yes, maybe the split is diluting each network's share.

But it doesn't seem like the market particularly cares about the dropping hash rate. In theory, that should deplete the value since security is dropping, threatening utility as congestion builds. But again, the market may not care (or maybe the markets just aren't efficient, and late buyers are working off incomplete information). In any case, all of this is unprecedented, so we have to wait and see what will happen. We might all be blind-sided by what happens next.

[deisik]

But it doesn't seem like the market particularly cares about the dropping hash rate. In theory, that should deplete the value since security is dropping, threatening utility as congestion builds. But again, the market may not care (or maybe the markets just aren't efficient, and late buyers are working off incomplete information). In any case, all of this is unprecedented, so we have to wait and see what will happen. We might all be blind-sided by what happens next

That could be envisaged and should have been expected

And thus taken care of and exploited to the full. Even if there is no mining cartel, it should have been thought up or invented since it is very handy as we talk about the actions of miners which look very much like a concerted effort even if they are prompted entirely by profit motives (but we still have Bitcoin Cash created specifically by miners). My point is that high fees and slow confirmation times didn't affect Bitcoin prices much (if at all), so the cartel could very well expect that their "manipulation" of mining difficulties won't affect prices much either (at least, in the short term). Thus they could safely deploy "new means" to meet their goals, those of earning more profits

[illyiller]

But it doesn't seem like the market particularly cares about the dropping hash rate. In theory, that should deplete the value since security is dropping, threatening utility as congestion builds. But again, the market may not care (or maybe the markets just aren't efficient, and late buyers are working off incomplete information). In any case, all of this is unprecedented, so we have to wait and see what will happen. We might all be blind-sided by what happens next

That could be envisaged and should have been expected

[...]

My point is that high fees and slow confirmation times didn't affect Bitcoin prices much (if at all), so the cartel could very well expect that their "manipulation" of mining difficulties won't affect prices much either (at least, in the short term). Thus they could safely deploy "new means" to meet their goals, those of earning more profits

Fair enough, Mr. Prophet. What do you think the long term implications will be? Maybe there is so much money (both smart and dumb) flowing into the market that none of this matters in the short term. But in the long term, this seems detrimental to Bitcoin's network effect. Investors need to choose one or the other: cheap Bitcoin with bigger blocks, or expensive Bitcoin with smaller blocks....

That's an oversimplification, but you can see how this might be damaging to Bitcoin's network effect as a whole, right? Maybe the split will be more accurately reflected in the markets when crypto returns to a bear market (whenever that is).

[deisik]

But it doesn't seem like the market particularly cares about the dropping hash rate. In theory, that should deplete the value since security is dropping, threatening utility as congestion builds. But again, the market may not care (or maybe the markets just aren't efficient, and late buyers are working off incomplete information). In any case, all of this is unprecedented, so we have to wait and see what will happen. We might all be blind-sided by what happens next

That could be envisaged and should have been expected

[...]

My point is that high fees and slow confirmation times didn't affect Bitcoin prices much (if at all), so the cartel could very well expect that their "manipulation" of mining difficulties won't affect prices much either (at least, in the short term). Thus they could safely deploy "new means" to meet their goals, those of earning more profits

Fair enough, Mr. Prophet. What do you think the long term implications will be? Maybe there is so much money (both smart and dumb) flowing into the market that none of this matters in the short term. But in the long term, this seems detrimental to Bitcoin's network effect. Investors need to choose one or the other: cheap Bitcoin with bigger blocks, or expensive Bitcoin with smaller blocks

As to me, there are more dangerous things awaiting us in the nearest future

That is not to say that fiddling with mining difficulty will have no consequences whatsoever (I already mentioned Litecoin surging a dozen %% yesterday), but personally, I'm inclined to think that the coming showdown (again) between the Bitcoin Core team and the NY agreement conspirators in November will quickly overshadow these minor tricks. It could be said that miners are acting flawlessly in their pursuit of profits, and these manipulations will quickly get forgotten once the tensions start to rise again in a month or so

[deisik]

And here we go again:



I'm curious if there is still anyone who is doubting that miners are making full use of the opportunity to earn more profits by moving their hashpower to and fro. Note that the BCash hashrate has dropped almost to zero, i.e. virtually no one is mining this coin presently (obviously till the next difficulty adjustment). By the way, people are massively buying up litecoins right now, the price has risen a whopping 20% within mere 12 hours today and continues to rise. It kinda looks folks are not quite happy with the miners' abuse of power and choose just to walk away from Bitcoin. Any Bitcoin, for that matter