An executive at a prominent cryptocurrency investment firm says that he doubts that bitcoin and bitcoin cash will be able to avoid the so-called bitcoin civil war as long as they maintain the same mining algorithm.
Since bitcoin cash launched in August, its advocates have made a concerted push to brand it as the true heir to bitcoin’s original vision as a peer-to-peer electronic cash system. Following the cancellation of SegWit2x last week, the bitcoin cash price surged to an all-time high while bitcoin entered a steep decline, shocking the community into the realization that bitcoin cash’s claims have some teeth.
Many influential figures, including both Andreas Antonopoulos and Jihan Wu, have cautioned the community to stray from framing the scaling debate as a civil war. They argue that the two cryptocurrencies have fundamentally different use cases and visions and can consequently coexist peacefully — just as bitcoin has with the legions of other altcoins that have launched over the years.
Bitcoin and Bitcoin Cash will coexist and serve different use cases, just like Bitcoin and Ethereum. Its not a zero sum game. Work on building your project, not on destroying the other
— Andreas (@aantonop) November 12, 2017
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 will be able to coexist as “friendly differentiated currencies” as long as they are fighting a zero-sum battle for a limited resource such as hashpower.
“The idea that BTC and BCH can be friendly differentiated currencies is nonsense,” he wrote. “PoW mining is one of the key underpinnings of ‘trustless digital scarcity’, and it breaks if miners can attack a chain and retain economic value of their hardware.”
Currently, bitcoin and bitcoin cash share the same proof-of-work (PoW) SHA-256 hashing algorithm, meaning that miners can easily switch back and forth between networks to mine whichever blockchain is the most profitable at any given time. Paul says that this necessarily renders one of the blockchains fundamentally insecure, preventing the two cryptocurrencies from ever reaching an armistice.
“As long as BTC and BCH are on same PoW algo, (at least) one is fundamentally insecure,” he explained. “We can have ceasefires amidst a longer ‘war’, but we’re in a state of disequilibrium. I expect the disequilibrium to persist for a while and cause a lot of drama before ultimate PoW fork.”
Technically, this is true of all altcoins that share a hashing algorithm with bitcoin, but no other mining-compatible coin poses as serious a threat to bitcoin’s viability. Paul warns that although they may currently coexist fine, the chain with more ideological support from miners could eventually mount an attack against the lesser one, meaning that its apparent security is merely a facade.
“You can leave a door unlocked for a year without a robbery,” he concluded, but it “doesn’t prove security.”
Featured Image from Zooey / Flickr