‘Orchestrated Transaction Reversal on Bitcoin Cash (BCH) Not Positive News for Bitcoin’: BitMEX Research
Bitcoin Cash miners have reportedly tried to reorganize the blockchain. According to BitMEX research, the miners may have been responding to a bug resulting from the Bitcoin Cash hardfork on May 15, 2019 that caused a string of empty transaction blocks.
According to the report,
“A few blocks after the hardfork, on the hardfork side of the split, there was a block chain re-organisation of length 2. At the time, we thought this was caused by normal block propagation issues and did not think much of it. For example, Bitcoin SV experienced a re-organisation a few weeks prior to this, of 6 blocks in the length. When Bitcoin SV re-organised, all transactions in the orphaned chain eventually made it into the main winning chain (except the Coinbase transactions), based on our analysis. However, in this Bitcoin Cash re-organisation, we discovered that this what not the case.
It appears, instead, that a 2-block double spend may have occurred on 25 transactions totaling an estimated 3,392 BCH.
“There appears to have been a plan by developers and miners to recover funds accidentally sent to SegWit addresses and the above weakness may have scuppered this plan. This failure may have resulted in a deliberate and coordinated 2 block chain re-organisation. Based on our calculations, around 3,392 BCH may have been successfully double spent in an orchestrated transaction reversal. However, the only victim with respect to these double spent coins could have been the original ‘thief’”.
“Indeed, based on our analysis, every single input in the 25 transactions in the orphaned block 582,698 was redeemed with a Sigscript starting ‘0014’ or ‘0020’. Therefore it is possible that nobody lost funds related to this chain re-organisation, other than the ‘attacker’ or ‘thief’ who redeemed these SegWit outputs, which may have accidentally been sent to these outputs in the first place.”
The researchers point out how the incident challenges, if not entirely undermines, the notion of immutability – a unique characteristic of blockchains.
The report concludes,
“However, although Bitcoin Cash has a much lower hashrate than Bitcoin, making this reversal easier, the success of this economically significant orchestrated transaction reversal on Bitcoin Cash is not positive news for Bitcoin in our view. In some ways, these incidents contribute to setting a dangerous precedent. It shows that it may be possible in Bitcoin. Alternatively, this could just illustrate the risks Bitcoin Cash faces while being the minority chain.”
You can check out the full report here.