It's going to be 2 legitimate currencies that are going to differ in value in exchanges. And each current BTC holder will be able to spend 2 coins (provided they take precautions against replayability; like making at first a double-spend to different wallets on the two chains separately)
Now the question is: what will the most BTC-rich people do?
BTC rich people are on both sides of the debate, expect to see some dumping all around as they make their positions known.
If one chain has 10% hashing power, for less or equal to 14 days the transactions could take 10 times more to validate. But that's assuming markets aren't correcting miners in the "right" direction in the meantime. Who wants to waste electricity on undervalued coins?
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Considering most of BTCs have been mined at the time bitcoin core had no competition; I'd say BTC rich people would tend to side with them. Because of emotional attachment, economic ties, and most importantly the dumb but very real reason of software maintenance.
I don't know if non-miners also check the difficulty or difficulty calculations, but if they do, even the minority chain can't fork without affecting existing users.
In that case everyone would need to fork in which case you're back to square one: what to do with the users that can't or don't want to fork. And if you need to fork anyway, it makes little sense to go with the minority chain.
In the end, miners mine what people buy. It's that simple.
Any speculation as to what happens if all miners move as one, motivated by ideology instead of economics, is just that.
I'm pretty sure the backlash against both the hostile miner and all of Bitcoin combined would not be worth it, except in a Joker 'Let's burn all this cash' kind of way.
The worst a majority can do, is to create a new longest chain without any transactions. But in that case the transactions would still exist and can be mined again later (and supplanted again later).
But that would require a miner to want to spend resources to hurt the minority fork.
If the minority fork is big enough to be a threat, that would require a lot of 'majority' miners to work together to pull off this attack, which would lead to a tragedy of the commons situation. Any majority miner who doesn't participate in the attack would gain.
If the minority fork is small enough to be a toy for a single miner, it still doesn't make sense to put in the still substantial effort.
Just look at the Ethereum fork. Afaik there have been no shenanigans pulled of by a majority miner on the minority fork, even though it's only about 10% of the size.
If majority of hashpower would start mining invalid blocks, there would still be some amount of hashpower mining the real chain. Transactions would confirm, albeit more slowly. For the miners mining the real chain the situation would be very good, because less competition from other miners -> more found blocks, more money. Probably the hash rate would grow pretty quickly, and if it wouldn't, the difficulty target would adjust after the 2 week difficulty adjustment period, and confirmation speeds would be back to normal.
Then when the difficulty has fallen enough to make mining profitable and have a consistent 10 minute block time the larger hash power chain will be able to mine at a significantly faster rate on the lower hash power chain and that will make it susceptible to a %51 attack.
The only way to avoid that scenario will be for them to switch the proof-of-work or manage to get a lot more hash power back on their chain. Being on the minority chain in that situation is frankly dangerous, the value should be discounted appropriately.
The blocks would happen farther apart, but it would also mean that the remaining miners would have much higher change of actually finding a block, since there would be less competition. Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward. Also probably people/exchanges would increase the fees since competition would be bigger to get the transaction to a block.
Also, it would make sense for exchanges etc to buy some mining power. That would make blocks appear faster, and also they would get the mining reweards, so it might be net positive. Or just simply bribe some miners to mine the valid chain. Very easy way to do that would be just to increase the transaction fees that they put to transactions.
That's not true. The chance of finding a block is the same for every hash given a certain difficulty, regardless of competition. So a miner with a certain amount of hashing power will always have the same chance of finding a block until the difficulty changes.
The remaining miners make the same amount per day, until difficulty is adjusted, and then much more.
Consider this: one pool with 20% hash power. They only get every 5th block, i.e. 1 coinbase reward every 50 minutes.
Now all the other miners fall away. Now this pool will still take about 50 minutes to find a block, but it will get 100% of them, thus still being rewarded a block every 50 minutes.
However, 2 to 10 weeks later (depending when the last difficulty adjustment was) (or longer, if difficulty adjustment is capped), a block is found every 10 minutes again, and the pool gets 100% of them, thus 5 rewards in 50 minutes.
On the other hand, gp also said: > Also as there would be the same amount of transactions and less blocks, the blocks would have more collected transaction fees -> bigger reward.
If I understand correctly, that the hypothetical 20% mining pool would immediately get 100% rather than 20% of all transaction fees when the other miners fall away.
However, AFAIK the coinbase (mining reward) dwarfs the transaction fees (for now), so that should not be that relevant.
From what I understood, a valid SegWit block will appear valid to an old client.
Certain invalid SegWit blocks will also appear valid to old clients, but those blocks will be rejected by SegWit-enabled miners, so they have little chance to be included should the miners change.
You're correct. However, I'm fairly sure OP was talking about Segwit (with 2x).
If most users/exchanges/services don't get on board by the time the scheduled segwit2x hardfork happens, then those blocks would be considered invalid.
So by the time the 2x fork comes up, the segwit-enabled chain will already be in use for several months.
Another point I'm wondering (sorry if that's a noob question) : Assume that some of the forks actually lead to a chain split with hashpower distributed 90%/10%.
At some point, the difficulty of the chains will adjust to bring both of them back to the "one block every 10 minutes" rate. However, this will not happen immediately but only when the current difficulty period would complete. Before that happens, the minority chain will still have the difficulty from before the split - the one that assumes 10x as much hash power as now is actually available. That sounds as if the minority chain could become effectively unminable for the rest of the difficulty period. Worse, as the period durations are measured in mined blocks, if blocks are mined slower, the difficulty period will also go on for a longer time.
Does that make any sense?
> So by the time the 2x fork comes up, the segwit-enabled chain will already be in use for several months.
Correct. But there's an asterisk here: most people (78%) are running bitcoin core, some run Core/UASF (5%), and some run bitcore (2%). Together, that's 85% of nodes. Core 0.14, Core/UASF, and bitcore are all compatible with segwit, but not with the blocksize increase. Even if you wait multiple months, if people stick with Core (a possible outcome) then they will see 2x blocks as invalid.
> That sounds as if the minority chain could become effectively unminable for the rest of the difficulty period.
The chain wouldn't be unmineable, it would just get mined slower (mining profitability wouldn't be impacted for miners staying on the chain provided the price stays the same). But you're right, blocks will come slower, throughput will be lower, and the adjustment will take longer.
Thanks for replying at all! That was really interesting and informative.
Yep, you're 100% right.
Thanks for being interested, haha.