As long as one miner is still mining the core chain, the transaction will be validated. It may take a little while at first, but difficulty will adapt.

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?

It would take years for the difficulty to adapt to a 10 minute block time if the hash power dropped that much, there is a limit per two week adjustment period. More than likely the code would have to be modified to accommodate a rapidly dropping difficulty. See my other post, but that essentially destroys the security of the minority chain.

BTC rich people are on both sides of the debate, expect to see some dumping all around as they make their positions known.

Not years. The difficulty is recalculated every 2016 blocks (14 days)[1].

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.

[1] https://en.bitcoin.it/wiki/Mining

But if blocks are being produced at 10% of the expected rate, it will take 14*10=140 days before the difficulty is recalculated.

If you're hard-forking, you can increase the recalculation rate for a few first new blocks. You can even recalculate every block for, say, 1000 or 5000 blocks .

But that wouldn't work for the 'victim chain' of the fork. In this case the idea is that 90% of the miners fork, while 10% remain on the original version.

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.

Realistically, what will happen if mining power moves to an alternative chain but Bitcoins are still what is traded at exchanges, is that miners will move back very quickly. The first one to move will gain the most economically, so game theory dictates the move back will be swift.

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.

Mining is centralised enough that large voting blocks already exist, so there is no telling right now which side will win. If the ETH/ETC split is anything to go by, both chaons will survive but only one is going to suceed

That's not true. If not enough people are mining the core chain, then it will be attacked, and your money will be stole due to double spend attacks.

You can't steal with a double spend. At worst you can send a transaction and then later undo it. But that would require the dishonest party to work together with or be the hostile miner.

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.

"when customers are calling them asking why their transactions aren't being validated that they will switch."

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.

The taking a little while to adapt is because their is less hash power, which means it takes longer to find blocks which means the remaining hash power will have less blocks for many many weeks. This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart.

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.

"This means their expected return is lower, not higher, they aren't getting a larger percentage of found blocks, and those blocks occur farther apart."

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.

> 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.

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.

Seems to me GP is right:

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.

This isn't the way it would go down. :) Let's wait and see...