Author: Moral Agent 2017-10-11 15:28:08
Published on: 2017-10-11T15:28:08+00:00
The difficulty adjustment algorithm in Bitcoin poses a problem where hashpower is not aligned with user interests. Though changing the algorithm may improve functionality, it does not solve the underlying issue. If this incentive problem cannot be solved and Bitcoin suffers a hashpower attack, then the project would fail. However, Bitcoin has developers who can publish a contingency plan such as an emergency hard fork to a different retarget algorithm. This hard fork can gain consensus if it is broadly preferred over the status quo. If miners think they can starve the legacy chain to death, they might be more likely to try. But if they get a credible signal that the legacy chain will react by changing the retarget function and thereby be more likely to survive, they might feel less committed to a strategy of starving the legacy chain. Emergency hard fork carries a risk, but depending on the scenario in November, it could be a risk worth taking.
Updated on: 2023-06-12T21:35:02.470064+00:00