Is a BTC - BCC flippening in the offing?

[Steven Schear]

[Disclosure: I am a strong supporter of L1 (Blockchain scaling) occurring
before any L2 (e.g., Segwit, Blockstream, Lightening Network, etc.) is
attempted. And even then all L2 must be thoroughly examined not only for
technical flaws but for possible misuses that affects the value and utility
of the underlying blockchain assets.]

Due to the economic and technical nature of Bitcoin and its blockchain its
more than possible that the new fork, widely being called Bitcoin Cash, BCH
or BCC, will overtake its rival fork now commonly called Bitcoin Core. The
effect of this "flippening" could be nothing short of disastrous for those
holding Bitcoin Core.

Since the recent Bitcoin hard fork we now have two Bitcoins: Core (the
original) and Cash. When the fork happened those holding BTC (in their own
wallets) were also able to claim an equal amount of BCC (for free). This
created a huge supply of BCC. However, many or most people rarely keep
their BTC in their wallets, preferring instead to keep them in online
exchange accounts. As a result, even though the exchanges warned people
they needed to withdraw their BTC to claim the BCC, most of those people
will never get that BCC. Instead it became a windfall for the exchanges.

When the fork occurred the Cash chain inherited the then current difficulty
factor of the original. When operating nominally both chains should have
new blocks discovered by miners about every 10 minutes. Because at the
outset the mining effort for Cash was only a small fraction of the Core's.
the rate new blocks were found (and therefore the transaction capacity)
initially was hobbled. This was anticipated and the developers included a
means to detect when the hashing power on this Cash chain was too low and
to quickly adjust, in 20% increments, the difficulty factor.

By far the main driver for miners is revenue. In general they will go to
whatever blockchain they earn the most. Analysis of the hash power being
expended on both chains versus the difficulties and value of each coin
showed that the two were converging insofar as mining profitability. There
is also an anomalous aspect to the sources of the BCC mining power. Unlike
that of BTC, where most of the hashing power is associated with known large
mining cartels, the majority of BCC mining is by unknown parties.There has
been significant variation of mining power over relatively short intervals
on both blockchains. The timing of this variation very much indicates that
the miners were attempting to beneficially manipulate both the value of BCC
vs. BTC and quickly decrease the mining effort for BCC.

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

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
15 August            6966      647       7591         923        115
   9.47        12.85       53
16 August            5984      484       6468         923        115
 11.07        17.14       50


   - Since 11 August Hash Power on the BCH chain has increased daily.
   - Hash power on BTC chain on the other hand fluctuates from day to day,
   by up to 1000 PH and the mempool continues to grow.


The table above are snapshots taken at a point in time each day. Their
individual states can be monitored in real time here
<https://bitinfocharts.com/>*.  Scroll down to the hash rate. BTC hash rate
is down to 4853 PH. This is more than 2000 PH below the table above and the
mempool <https://blockchain.info/charts> has now exceeded 65MB. A Death
Chain Spiral may have set in but is being "managed".

This large fluctuation of BTC hash rate could be the miners preventing
difficulty from adjusting downwards, and at the same time growing the
mempool. It is also possible that with over 1000 blocks to the next
difficulty recalculation, we may not see another difficulty adjustment on
BTC anytime soon.

It is uncanny that we see very little discussion and debate at the very
top. It is as though the NYA agreement have settled everything. However
make no mistake. What seem calm belies what is happening in the background.
Like a duck on the water paddling furiously underneath.

Over at r/bitcoin talk seems to center around price and technology. Nothing
about any negativity, usability or the growing mempool. Censorship of
robust discussions is just downright deceitful. Especially if it is the de
facto forum. It must quit being a propaganda organ. There will be
consequences.

The people around Segwit may be frantically on the phone, fax and email
arguing and pleading with the miners. They can see the writing on the wall.
Only 124 blocks were found in the last 24 hours. Block time have increased
to 11 minutes and the mempool is in excess of 70MB. It is "too little too
late". For many of the miners "Revenge is a dish best eaten cold".

Steve
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