Loading ...First, rewind to August of this past year, for some edification:
“After Bitcoin fork on 1 August it became obvious that Bitcoin the protocol did have an inherent vulnerability. This was that if the chain loses mining power it will have to wait a full 2016 blocks before the difficulty can be adjusted to bring the block time back to the normal 10 minutes. This vulnerability was never considered or analysed because until now the miners had no choice but to keep mining on the Bitcoin chain. After the fork however, the whole landscape has changed. Miners have a choice and power to influence the fate of the chain they are mining on.”
A Chain Death Spiral occurs when the block time increases leading to some miners switching chain. As more miners leave the problem gets worse and a feedback loop results in the dreaded Chain Death Spiral.”
Now, this week:
“Difficulty automatically adjusts itself to match the hash rate so that transactions won’t take too long. But the difficulty only adjusts every two weeks at the moment, so, if the hash rate suddenly plummets the difficulty could be rendered too high for the amount of processing power on the network. This in turn could mean severe delays in completing Bitcoin transactions. This was felt and mentioned by many over the weekend and it left Bitcoin on the cusp of a catastrophic failure. The spiral starts once the delays are unbearable and investors decide to dump the coin. This leads to a price drop which ultimately makes it unprofitable for miners who then move to other coins.
“Transactions get backlogged to a point where the coin becomes basically useless”
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ponziworld.blogspot.com
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