Sunday, February 5, 2023

Put a Hard Limit on Bitcoin Cash Block Times to Make It Powerful, Says Developer

Put a Hard Limit on Bitcoin Cash Block Times to Make It Powerful, Says Developer

Bitcoin Cash cannot rely on “benevolent miners” to survive, says Bitcoin Unlimited’s lead developer Andrew Stone. Users and businesses alike will not support a blockchain that can’t reliably process transactions at regular intervals. To this end, he suggests implementing a process called “Tail Removal” — a 20-minute deadline for block validation that would keep BCC even more regular than Bitcoin.

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To put it (perhaps too) simply, “Tail Removal” shortens the time window in which a block is valid. If it isn’t confirmed within 20 minutes, the network would drop difficulty dramatically for the next 20 minutes, virtually guaranteeing it will confirm.

“I believe that this feature is very valuable for a use-oriented blockchain like Bitcoin Cash because it will offer a reliable worst-case confirmation time,” Stone wrote in a lengthy Medium post detailing his research and conclusions.

The Bitcoin Cash price has surged this week, posting even higher percentage gains than Bitcoin amid renewed interest in its potential. At press time, it was up to $566 USD per coin.

For Everyday Use, Bitcoin Cash Must Be More Reliable Than Bitcoin

But first, some background as to why this is needed.

Andrew Stone Bitcoin Unlimited
Andrew Stone

Bitcoin Cash may hard-fork to replace its difficulty adjustment algorithm (DAA) in November. Stone has been analyzing data to determine which DAA is preferable — not an easy task.

Bitcoin Cash transaction confirmations should at least be as consistent as Bitcoin, Stone said. But since BCC is supposed to be a daily-used currency, it actually needs to be more consistent.

The main issue is keeping Bitcoin Cash’s block confirmation times stable and reliable, in an environment where miners may suddenly leave or join the network en masse. Depending on a number of factors (mainly difficulty and token price for BTC and BCC) BCC’s network will either blurt out several blocks in a short time, or experience hours of delay.

Miners Come When Difficulty’s Low, Quit When It’s High

As we’ve noted previously, Bitcoin Cash developers built in the DAA to avoid the blockchain grinding to a halt if there were not enough miners to support high difficulty. While it has kept the chain going, it has produced some spasmodic block times. Miners have tended to jump in when the difficulty drops, then leave when it goes back up again.

Block confirmations decreased by 30x on October 5th, and increased about 20x on October 12. This irregularity has drawn some mockery from BCC’s detractors, and led developers to look for a solution.

Stone initially performed data analysis using Neil Booth’s mining simulator and four potential algorithms: cw-144, k-1, wt-144, and piec.

However, even the new algorithms resulted in some overly-long block discovery times, Stone found. One even took eight hours. That’s unacceptable for a daily-use cryptocurrency.

MinersPart of the analysis involve trying to think like a “greedy” miner — one motivated by profit rather than support for the technology. And despite what you might read in the industry press, that’s most miners.

That’s to be expected, since almost everyone tends to put their economic interests first — but as Stone pointed out, Bitcoin Cash cannot and should not rely on miners’ goodwill or loyalty to the cause.

Even “stable miners” (those who continue to mine one chain regardless of profit) won’t stay on their preferred chain long if the income disparity grows too wide. “The economics of this situation drives (stable/benevolent) miners to become greedy,” Stone added.

Regulating Block Times Is Like Cruise Control, Only Harder

He described adjusting to blockchain difficulty changes as a “control theory” design problem, similar to a car’s cruise control. Cruise control must regulate flow of gas to keep the vehicle moving at a constant speed, despite external changes like hills and road conditions.

The car’s computer relies on simple feedback from the car’s speedometer — but a cryptocurrency blockchain’s feedback data is more “noisy”. Miners can also get lucky or unlucky at finding blocks, for example.

In the end, he concluded, it’s provably impossible to choose the right algorithm for the task unless some miners are benevolent. Therefore, it’s necessary to redefine the original problem.

And so, Stone proposed the solution of reducing block validity time and dropping difficulty if it isn’t confirmed by the 20-minute deadline. It removes the “long tail” in which a block is usually valid, hence the “Tail Removal” term.

A form of Tail Removal already exists on the Bitcoin Cash testnet, but it would need some tweaking to eliminate any incentive for miners to “cheat” by attempting to mine blocks in advance.

Can Bitcoin Cash Beat Bitcoin?

Roger Ver Bitcoin CashSetting a hard time limit on when a block will be confirmed will ultimately make Bitcoin Cash more valuable than Bitcoin, Stone said.

For now, Stone’s ideas are only a proposal. Bitcoin Cash is tentatively set to hard-fork in November to implement the new difficulty algorithm, but Tail Removal could solve the problem more thoroughly.

Unlike Bitcoin’s long brouhaha over block sizes, SegWit and its “2x” component, Bitcoin Cash’s November hard fork isn’t considered controversial. None of the improvement proposals are particularly contentious, and expectations are that BCC miners will follow the developers’ lead.

Would Tail Removal add value to Bitcoin Cash that Bitcoin doesn’t have? Please share your thoughts in the comments.

Images via Wikimedia Commons, YouTube, BBC

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