Meet the players in the BCH Market Manipulation Lawsuit

On Thursday, a lawsuit was filed in Florida’s Southern District against a group of cryptocurrency heavyweights alleging intentional fraud and market manipulation surrounding the recent Bitcoin Cash BCH update.

The civil suit filed by United American Corp. against multiple Bitmain related companies, Bitcoin.com, Roger Ver, Jihan Wu, Kraken, Jesse Powell, Amaury Sechet, Shammah Chancellor and Jason Cox alleges the group was involved in a scheme to manipulate the cryptocurrency market for Bitcoin Cash in an effort to highjack the Bitcoin Cash network, resulting in a global capital meltdown of more than $4 billion and causing countless people irreparable harm.

Breaking News: Lawsuit links Bitmain, Ver camp to ‘premeditated takeover’ of Bitcoin Cash network

Some of the names are well known to the Bitcoin community while others have been background players. Let’s have a look at the who’s who in this landmark cryptocurrency lawsuit.

Bitmain Inc. – More commonly known as Bitcoin US, Bitcoin Inc. is an American corporation wholly owned by Bitmain Technologies Holding Company. With Bitmain Inc. being a USA corporation, it will be difficult for the larger company to claim the suit doesn’t belong in American courts. 

Bitmain Technologies LTD. – Founded by Micree Zhan and Jihan Wu in 2013, Bitmain rose to prominence and then dominance in the bitcoin mining space with their ASIC cryptocurrency miners.

Bitmain Technologies Holding Company – The company filed for an initial public offering this past September 26 with the Hong Kong regulatory agency. That IPO has been in doubt of late with disastrous financials leaking and their reputation taking a beating during the hash war that triggered this lawsuit. 

Saint Bitts LLC d/b/a Bitcoin.com – Bitcoin.com is one of the more controversial websites in the cryptocurrency industry. Bitcoin.com is probably responsible for onboarding more people to Bitcoin that any other site. They offer news, tools and even online gambling but after the 2017 BTC-BCH split, and their propensity for hyping up poorly planned and executed ICOs they’ve become more divisive in the past couple years.

Read the Court Filings from the BCH Manipulation lawsuit

Roger Ver – Known as the Bitcoin Jesus due to his early wiliness to invest and travel the world spreading the gospel of Bitcoin. He’s fallen from Grace particularly after the 2017 BTC-BCH fork. Ver would debate anyone and everyone, claiming BCH was the true Bitcoin and any chain that deviates from the Satoshi Whitepaper couldn’t claim to be Bitcoin. His decision to support the ABC instance during the hash war and his penchant for putting his promotional support behind pump and dump ICOs has left many of his disciples abandoning the faith. Ver denounced his American citizenship in 2014 and was once denied a USA visa as US immigration was unsure if he’d leave the country and he’d remain as an illegal immigrant. This case should offer US immigration sufficient grounds for a visitor’s visa.

Jihan Wu – He’s the public face of the Bitmain empire. A regular on the conference circuit and recipient of the lion’s share of both the praise and the scorn from the cryptocurrency community. He was the power broker during the 2017 battle for larger blocks in BTC, his mining pools held enough power to determine whether Blockstream’s Segregated Witness and the plan to leave BTC at 1MB blocks or if the big block battle would continue. Wu negotiated a split which created Bitcoin Cash BCH and took the big block supporters with him. He also played a major role in the Hash War, funding the controversial ABC instance and then arranging the mercenary miners to move over to the BCH chain. Like Ver, the split has left his reputation in tatters. 

Payward Ventures Inc. d/b/a KrakenKraken is a cryptocurrency exchange site that was funded by Roger Ver and operated by his high school friend Jesse Powell. The site was one of the more popular exchanges operating in the US, Canada, Japan and the EU. For a couple of years, it stood as the largest exchange in the industry before giving way to companies like Coinbase and Binance. This lawsuit isn’t the first time Kraken has faced scrutiny, earlier this year they were under investigation by the New York Attorney General’s (NYAG) office who was on a fact-finding mission to see what if any measures exchanges took to protect their customers from market manipulations.

Jesse Powell – Powell, in addition to being Ver’s high school friend, is the CEO of Kraken. When the NYAG was conducting their investigation, Powell made a point not to cooperate and declared the investigation was hostile and bad for business. Unlike Ver who renounced his USA citizenship and left the country, Powell still resides in the US and could be forced to do the heavy lifting if Ver doesn’t return to answer the suit.

Amaury Sechet – Sechet is the lead developer for Bitcoin ABC and the self-proclaimed benevolent dictator of Bitcoin Cash BCH. The anarchist is a French national who is responsible for the contentious changes to the node software that ultimately caused the rift and eventual fork in the BCH chain.

Shammah Chancellor – Is a developer with Bitcoin ABC who works with Sechet.

Jason Cox – Along with Chancellor, works with Bitcoin ABC as a developer.

United American Corp. – The Florida-based company focuses on telecommunications applications, including BlockchainDomes, which are eco-friendly crypto mining facilities that use the generated heat to power green houses and grow food. In 2017, UAC moved heavily into the development and implementation of blockchain-related technologies. The company believes that the high-jacking of the Bitcoin Cash network could imperil its investments, as the changes brought by Bitmain and Ver’s group have altered the fundamental economics of the business.

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Breaking down the United American lawsuit against Bitmain, Roger Ver, et al

The cryptocurrency world was rocked Thursday by the announcement of a huge lawsuit that was launched by United American Corp. (UAC) against a large number of Bitcoin Cash BCH supporters, including Bitmain and its co-founder Jihan Wu, Bitcoin.com founder Roger Ver, Amaury Séchet of Bitcoin ABC, the Kraken exchange and its CEO, Jesse Powell, as well as a few others. The lawsuit contends egregious amounts of fraud and market manipulation on the part of all defendants and could forever change how BCH is viewed, MarketWatch first reported.  The lawsuit and all updates will be available on the www.bitcoincashlitigation.com website.

UAC points out in its lawsuit, filed in U.S. District Court for the Southern District of Florida, that the group of individuals colluded to manipulate the BCH network and take control of its functions. The company asserts that BCH has become centralized, which violates “all accepted distributed and decentralized standards and protocols associated with Bitcoin since its inception.” The Florida-based blockchain company further asserts that Ver, Wu, et al worked in conjunction with the Chinese government in order to lead a hostile takeover of the cryptocurrency.

Breaking News: Lawsuit links Bitmain, Ver camp to ‘premeditated takeover’ of Bitcoin Cash network

The blockchain is meant to be a decentralized solution. To maintain this decentralization, the network operates on a consensus basis that prevents a single person or group from being able to control the majority of the hash, or mining power. If someone is able to control 51% of the network, they can effectively and autonomously decide the blockchain’s fate and this is what the defendants have been able to achieve.

Bitmain publicly acknowledged its support of Bitcoin ABC during the hash wars and launched efforts to force the BCH network to follow ABC during the hash wars. It rented hash power and even deployed 90,000 of its own mining rigs in favor of ABC mining operations, a move that can be seen as an attempt to centralize and control ABC. There were also speculations that Bitmain’s Jihan Wu was unloading BTC to fund the ABC mining operations, which, in turn, drove the prices of crypto down. Now, people are wondering if Wu is just cashing out amid the hash war.

Meanwhile, the U.S. Department of Justice is also allegedly looking to get involved in the case against Bitmain and Ver’s group through the FBI Cybercrimes Division.

Who are the defendants?

Roger Ver is a “crypto anarchist” and has also directed the mining operations of his Bitcoin.com mining pool to ABC. In addition,Bitcoin.com was a recipient of some of the hashing power that was rented by Bitmain in order to support ABC.

Ver has direct links to the Kraken crypto exchange through its founder, Jesse Powell. They are friends with a history that dates back to their high school days and Kraken was one of the first exchanges to show favoritism for ABC. It was also the first exchange to declare that ABC was offering the true version of BCH.

The lawsuit explains that Bitcoin ABC, the development and mining group that favored moving BCH away from its original design, has now forced changes on the blockchain without regard to what the community wanted. It introduced arbitrary checkpoints that can allow Bitcoin ABC to take over the network. UAC explains, “Combining this change with the hashing power of Bitcoin ABC backers amounts to centralization.  They will be able to override any consensus reached by the rest of the network, forcing other to conform or create an unwanted hard fork.”

UAC also asserts that the entities were fundamental in directing hash power—including through the renting of additional mining equipment—during the BCH “hash wars” this month that saw them force the direction the BCH blockchain was headed. The action resulted in an unprecedented amount of hash being processed by Bitcoin ABC backers and further disintegrated the integrity of the BCH network.

UAC has been involved in blockchain innovation since 2017 and has invested more than $4 million in the space. It argues that the selfish manipulation of the blockchain is not consistent with BCH’s design, and that it has completely altered the “fundamental economics of the business.” In simple terms, it can be viewed as ordering a Filet Mignon in a restaurant and being delivered a burnt hamburger, while still paying for the Filet Mignon.

For a deeper narrative about the scheme, visit the Bitcoin Cash Litigation website.

The full filing can be found here.

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Lawsuit links Bitmain, Roger Ver group to ‘premeditated hostile takeover’ of Bitcoin Cash network

Bitmain, its co-founder Jihan Wu, along with his “team of conspirators” including Bitcoin.com CEO Roger Ver, ABC lead developer Amaury Sechet, Kraken and its CEO, Jesse Powell, will have a lot to answer for. On Thursday, a lawsuit was filed before the U.S. District Court for the Southern District of Florida accusing the group of fraud and market manipulation, asserting that these people worked “with the knowledge and support of the Chinese government to stage a premeditated hostile takeover” of the Bitcoin Cash BCH network.

Florida-based blockchain company United American Corp. (UAC) is seeking an emergency injunctive relief, citing losses that stemmed from the Bitcoin Cash hard fork last November 15. On that day, a hash war was fought with miners voting between two competing implementations of the BCH protocol—Bitcoin SV and ABC. ABC took a temporary early lead due to an artificial burst from “rented” hash power subsidized by Ver’s Bitcoin.com, and some exchanges—Kraken in particular—prematurely listed the ABC token as Bitcoin Cash BCH.

Now the other shoe has dropped.

Lawyer Brian Miller of Akerman law firm, who heads the team of lawyers that handles the UAC litigation, said there was “a scheme by a tight network of individuals and organizations designed to co-opt the cryptocurrency market for Bitcoin Cash, effectively hijacking the Bitcoin Cash network, centralizing the market and violating all accepted distributed and decentralized standards and protocols associated with Bitcoin since its inception.” The scheme, allegedly spearheaded by Bitmain and Ver’s camp, reportedly caused “a global capitalization meltdown of more than $4 billion and caused many American and Canadian coin holders to suffer financial damages.”

Also named in the UAC lawsuit were ABC developers Shammah Chancelor and Jason B. Cox.

Aside from the awarding of restitution and compensatory damages, the lawsuit also seeks to prevent ABC from continuing to implement checkpoints on the Bitcoin Cash network and other software implementations that will “prevent the resulting chains from being able to be re-merged. UAC also wants the court to require ABC “to return the blockchain to its previously decentralized form with the previous consensus rules.”

More importantly, UAC wants to prove that the ABC camp, which has “some of the biggest U.S.-based and international names and entities in the digital currency world” among its ranks, is being backed by the Chinese government, all in an effort “to centralize the Bitcoin Cash network resulting in Chinese entities now having established dominance over this important segment of the cryptocurrency market with proprietary software checkpoints and instituting other means of control over the system.”

Lawry Trevor-Deutsch, VP of Corporate Affairs for UAC, said, “We envision a future led by an open, democratic and collaborative community fostering innovation and freedom. No entity or group of entities should seek to seize control of this platform for their own narrow interests or create rules that inhibit new competition and future technological innovation. That’s what this lawsuit is about.”

Full filing can be found here.

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Business damaged by Bitcoin Cash civil war sues in U.S. Federal Court, action alleges takeover of cryptocurrency network by china-backed players

Miami, FL. – In a lawsuit filed on Thursday December 6th in the United States District Court for the Southern District of Florida, United American Corp. a Florida Company, petitioned the court for emergency injunctive relief citing losses stemming directly from the Bitcoin Cash fork that began on November 15, 2018, and asserting that a team of conspirators involved in what many are calling the “Bitcoin Cash Civil War” worked with the knowledge and support of the Chinese government to stage a premeditated hostile takeover of this popular cryptocurrency platform.

The litigation, being handled by a team of attorneys led by Brian Miller, of the powerhouse Miami-based law firm Akerman, alleges there was “a scheme by a tight network of individuals and organizations designed to co-opt the cryptocurrency market for Bitcoin Cash, effectively hijacking the Bitcoin Cash network, centralizing the market and violating all accepted distributed and decentralized standards and protocols associated with Bitcoin since its inception.” It claims this scheme caused “a global capitalization meltdown of more than $4 billion and caused many American and Canadian coin holders to suffer financial damages.”

Since 2017 United American Corp. has moved heavily into the development and implementation of blockchain and blockchain technologies and invested in the deployment of over $4 million of infrastructure towards that end. Those investments can be greatly imperiled by changes in the Bitcoin Cash network brought about by the alleged scheme, changes that have altered the fundamental economics of the business.

The lawsuit moves against multiple defendants: Bitcoin.com, Roger Ver, Bitmain Inc. Bitmain Technologies LTD. Bitmain Technologies Holding Company, Jihan Wu, The Kraken LLC, Jesse Powell, Amaury Sechet, Shammah Chancelor and Jason Cox.

This legal action will seek to prove that specific key actors, including some of the biggest US-based and international names and entities in the digital currency world, have been operating with the support of the Chinese government to centralize the Bitcoin cash network resulting in Chinese entities now having established dominance over this important segment of the cryptocurrency market with proprietary software checkpoints and instituting other means of control over the system.

“We want the future of cryptocurrency in general and Bitcoin Cash in particular to live up to the tremendous potential of the Satoshi white paper’s original vision,” said Lawry Trevor-Deutsch, Vice President of Corporate Affairs for United American Corp. “We envision a future led by an open, democratic and collaborative community fostering innovation and freedom. No entity or group of entities should seek to seize control of this platform for their own narrow interests or create rules that inhibit new competition and future technological innovation. That’s what this lawsuit is about.”

For additional information on the alleged Bitcoin Cash takeover scheme click here.

Contact:

Maurizio Passariello

(305) 529-9916 office
(786) 285-6398 mobile

MPass@BendixenOnline.com

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Bitcoin SV to process 1TB in transactions within three years

The hash war between Bitcoin SV and Bitcoin ABC is far from over. Bitcoin SV (BSV) is continuing to develop the blockchain in accordance with what cryptocurrency was meant to be—a peer-to-peer electronic cash—in an effort to ensure that crypto fulfills its reason for existence. To that end, preparations are being made that will allow the network to handle more transactions than any other cryptocurrency.

Dr. Craig Wright stated in a Medium post two days ago that BSV will be able to process as much as 1 terabyte (TB) of transactions within three years. This volume is imperative to allow a blockchain to handle the number of transactions that can rival other types of payments, including PayPal and credit card processors.

Currently, BSV blocks are limited to 64 megabytes (MB). This is going to increase to 512MB in six months and, within a year, will be as large as 2 gigabytes (GB).

Wright also asserts that miners will be able to make substantial returns within six months because of the scaling endeavors. He explained, “Bitcoin as SV will have miners earning over $8,000 a block based on use alone. That equates to $640 a Bitcoin on exchanges, and we have not factored in the gambling price of Bitcoin, just what miners will earn as a service.”

Miners should get behind BSV now to take advantage of the mining capabilities. As Wright points out, “With the Teranode project nChain will be scaling Bitcoin SV to handle over 1.0 TB within the next 3 years (aiming for 2) and growing sizes from there. At that level, miners will earn over $600,000 for each Terabyte block, and this is every 10 minutes on average.”

The crypto pioneer and chief scientist for nChain added that, within two to three years, BSV will be processing 6.5 million transactions a second. This is “Visa, MasterCard, banking in SWIFT, and ALL global currencies (not just crypto) in under 15% of a block.”

BCHSV, the cryptocurrency that was created to support the hard fork of Bitcoin Cash, has seen substantial gains over the past week. After reaching a low of around $38 on November 22, it is now trading at $103.79, according to CoinMarketCap, at the time of this writing. On the other hand, BCHABC, which represented the other half of the hash war, continues to fall. According to the latest data from CoinMarketCap, its value has dropped over 20% and continues to decline.

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Wormhole apparently launching on Bitcoin SV ‘soon’

“For the good of the coin.”

When Wormhole.cash launched in August, it promised to be a game changer that would allow any group or person to create a token that could represent bonds, stocks, loyalty points, and even fiat. But when the facts were revealed, it was found that the project co-developed by Bitmain Technologies and supported by Bitcoin ABC was nothing but a nefarious plan that strips away the very heart of not just Bitcoin Cash—but the entire cryptocurrency ecosystem.

Then came November and the scheduled protocol upgrade of the Bitcoin Cash network, which also saw a hash war being fought with miners voting between the Bitcoin SV (Satoshi Vision) and Bitcoin ABC implementations of the BCH protocol. And, lo and behold, Wormhole is apparently “coming to Bitcoin SV soon.”

Not much is known about this project supposedly based off Bitcoin SV. On GitHub, the team behind this project said they are “launching soon,” noting that “our fork of Wormhole is in active development.”

According to the team, “While this was a somewhat contentious addition to Bitcoin Cash, our small group of developers sit squarely between supporting Wormhole and supporting Bitcoin SV, big blocks, along with following the insight and strength of Satoshi’s Vision. While many, including Satoshi himself, feel that burning BCH to create WHC is a problem. We feel there is much to be explored in launching Wormhole on Bitcoin SV and look forward to working with BitcoinSV in creating Wormhole on Satoshio’s [sic] Vision of Bitcoin.”

It would appear that the Wormhole SV team doesn’t really understand the original Satoshi Vision for Bitcoin—a blockchain with a protocol that is stable, scalable, secure and enables safe, instant transactions.

The original Wormhole project, which emulates Ethereum (ETH), will result in the Bitcoin Cash network turning into a developer’s playground, opening the system up to a whole host of troubles by turning the ever-watchful eye of securities regulators and government agencies towards Bitcoin Cash. We explained how Wormhole will destroy Bitcoin BCH in depth here and here.

And now we have Wormhole SV promising to be “for the good of the coin.” So again we ask: with Wormhole coded to be able to control and ultimately destroy the network, how can we call it “peer-to-peer electronic cash”?

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Fresh Bitcoin Cash insider trading suit vs Coinbase goes to court

An amended class action lawsuit alleging insider trading at cryptocurrency wallet and exchange service Coinbase will go to court, after an initial application to the courts was turned down on a legal technicality.

The decision, published in court documents uploaded by Coinbase, means the case will be heard on January 31, 2019, in a district court in north California, giving the plaintiffs the chance to put their arguments in front of a judge for the first time.

The case concerns allegations of insider trading at Coinbase over its handling of the bitcoin BCH rollout in 2017, which many users had felt resulted in Coinbase staff profiting at the expense of the market.

The initial application was rejected in October, after petitioner Jeffrey Berk had failed to “describe the scope or content of Coinbase’s duty.” However, the amended filing now highlights how Coinbase breached its own listing rules, which claimants suggest will now form the basis of their class action.

According to the filing, Coinbase did in fact sell BCH at artificially inflated prices to its own benefit during the launch last year. It stated, “The sudden launch (of BCH) was effectively part of an attack by Coinbase and (CEO Brian Armstrong) to depress the price of BTC and to inflate the price of BCH, to encourage more transactions and greater profitability for Coinbase.”

“As a consequence of this scheme, the Individual Defendants and Coinbase enabled Coinbase to earn significant fees from the trades of its customers, from which Coinbase earned a spread over an inflated price for BCH, and to avoid a ‘run’ on the Company by sellers anxious to take advantage of the inflated price, by closing down trading within minutes of the Launch to all except certain insiders who were positioned to and did sell BCH at inflated prices during the Launch,” according to the filing.

Coinbase has until December 20 to file a response to the claim, ahead of its court hearing at the end of January.

The judge who ruled on the first filing, District Judge Vince Chhabria, accepted that Coinbase had “bungled” the rollout of BCH.

The firm has since conducted its own internal investigation, which perhaps unsurprisingly found no foul play.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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More DDoS attacks on Bitcoin (BCH-SV) friendly websites

If the only defence of your policies is to silence your critics, the chances of your ideas being the wrong ones are pretty high.

Over the past week, CoinGeek.com has suffered through several distributed denial of service attacks (DDoS). The first one was a big one, and we had to upgrade our defences. Thank-you to the beautiful people at Cloud Flare, subsequent attacks have caused minimal disruptions.

On Thursday BitcoinSV.io was hit with a massive DDoS attack.

The attack comes soon after the website published a listing of wallets, block explorers and other business and services that have chosen to add their support for Bitcoin SV after the ABC decision to move away from Bitcoin BCH.

The timing of these attacks could be coincidental, but the timing of the attacks is somewhat suspect. We won’t cast aspersions towards any of the bastions of free speech in the bitcoin community, but it does highlight a problem with society in recent years.

I was always led to believe that you let your opponent talk and you listen. You present your well-reasoned arguments and allow the better ideas to succeed for the betterment of the society.

With their most recent changes, 5th since the upgrade, ABC’s critics continue to grow. People are critical on social media, and now the mainstream tech press is starting to join the chorus of critics admonishing the Bitmain and Bitcoin.com funded group of developers.

TNW, formerly known as The Next Web, has written a scathing article titled “Bitcoin Cash ABC update exposes potentially catastrophic vulnerability” where it highlights the vulnerabilities opened up by ABC’s slapdashed approach to blockchain development.

For many on Twitter, the checkpoints are a bridge too far as it removes the security provided by the proof of work principal as laid out in the original whitepaper, with many saying and we agree, that ABC is no longer Bitcoin.

The move removes the trustless decentralized system, and it allows a “trusted central authority” to publish these checkpoints. Ask yourself, whom do you trust? Roger Ver, Jihan Wu or Amaury Sechet, I’m sure they’re all nice people to share a meal with but do you trust them with all your money?

DDoS attacks, several updates untested updates and all manner of collusion with wallets and exchanges seem like the actions of desperate men.

There are rumours that the Chinese government is behind this or there is a secretive cabal trying to control the chain for nefarious reasons. I believe it’s much simpler than a crazy conspiracy; this is about plain old-fashioned greed.

The group is desperate to make Wormhole token a thing. Back in August, there was an offer, 1000 wormhole tokens for every BCH burned. This 1000-1 ratio isn’t for everyone, the general public would be and will be offered 10-1 rate when wormhole becomes a widely accepted token.

My sources tell me that Jihan, Roger and a few trusted allies either orchestrated or took advantage of this 1000-1 proposal.

Despite crowing from Ver, the hash war isn’t over and as the chorus of dissent against ABC’s move away from Bitcoin grows louder, and the support for SV swells, we expect more attempts to silence the critics but you can’t DDoS the planet.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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When Bitcoin ceases to be Bitcoin (the 2nd death)

The post originally appears on Medium and we republished with permission.

On the 18th of November, 2018, deadalnix pushed the following commit to the bitcoin-abc repository which was publicly released yesterday: https://github.com/Bitcoin-ABC/bitcoin-abc/commit/917d65774c40c6bfad500a660e581c8ea5e20df0

The theory behind this is a defense against hostile reorganizations (there is no actual evidence of such actions having been taken) with a rolling checkpoint system. A block was finalized once it had received ten confirmations — even if an alternate chain had more proof-of-work, if it conflicted with a checkpoint, the node would not switch over to the longest chain.

In doing do Amaury Sechet has not only abandoned any pretense of Bitcoin ABC following the Bitcoin model of blockchain security. He has opened it up to new attacks that require centralised decision-making to engage in permissioned mining by ignoring the longest chain to defend against. If the below attacks are carried out it will not be miners that decide which transactions are considered canonical according to bitcoin rules, but a central committee most likely made up of Amaury, Jihan and Roger.

It is important to note that at this time none of the other ABC compatible implementations include this change. It appears that it was implemented unilaterally and without consultation by Amaury Sechet in a continuation of a well established pattern. This is the past, present and future of ABC coin.

If ABC want to go down this road and implement the rest of their roadmap that is their prerogative. But please do not try to call it Bitcoin whilst undermining the most fundamental principles that make Bitcoin what it is.

Overview of the Commit

There are two chains — an honest chain (that follows the majority of the mining consensus), and a shadow chain (that follows the attacker).

The game theory behind the defense is that if a hostile miner produces the shadow chain, once it diverges from the honest chain by more than ten blocks it is considered useless, as it cannot reorganize the honest chain — even if it has more work. The attacker would give up and stop extending the shadow chain.

Checkpoints are maintained by node operations themselves, and this behavior of checkpointing is enabled on all nodes by default.


The Double-Spend Attack

If an attacker controls more than 50 percent of the processing power driving the ABC blockchain, they can submit a set of 10 blocks to the network by reorganizing the ten honest blocks. If this attack is executed at the same time as the network finds the 10th block in that submitted a sequence (and thereby selecting it as an honest checkpoint), it can cause ABC to suffer a chain split. ABC is currently open to being maliciously hard forked.

Since not all information gets propagated over the network at the exact same time, some nodes will see a 10-block reorganization — which they will reject — and others will see a 9-block reorganization, which they will accept. The network will then fork into two.

If there is two exchanges on different forks, an attacker is able to sell the same coin twice on both exchanges for a double-spend attack.

The Sybil Attack

Cost of Attack: ❤0K (Rental Hash)

minority hash rate miner can perform a network attack. Normally, if they mine ten blocks in a sequence and submit their own blocks for processing while ignoring other miner’s blocks, it becomes a minority chain split that nodes (who only recognize the longest chain) will inevitably ignore. However, if a node that is out of sync reconnects to the network — for instance, if it has gone offline for a few hours — it could receive data related to the wrong blockchain first, leading to the real chain being rejected from that point onward. The attacker would then have full control over what transaction a node accepts, and what can be exploited to execute double-spend attacks.

As a rule of thumb in developing node infrastructure, you cannot rely on the timestamped data to be synced with other nodes.

Note: The original white paper appeared to imply that the ability for nodes to be switched off, and then verify what happened when it was offline, was important:

“Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone.”

BCHABC requires a node to be online 24×7.


FURTHER GAME THEORY

Bob and Alice are trading BTC for BCH.

Bob says he sent Alice the BTC, so Alice should send the BCH. Alice starts up her full node that has been online during the day and syncs the latest blocks. When her node has stopped syncing, it says that Alice received BTC — she then sends Bob BCH. Later, she finds out that she has synced a malicious 10-block fork that has become immutable, and the actual BTC she received were spent on something else on the main chain.

While the attack relies on Bob getting the malicious 10-block fork to Alice before another honest miner has sent her the real chain, there are ways to optimize this scenario. For instance, he may be spawning Sybil nodes to maximize his odds of this happening.

In a typical Bitcoin scenario, Sybil attacks are hard to perform because just one of the nodes you connect to needs to be honest for the attackers to fail. In this case, an attacker just has to get to you first. Furthermore, if an attacker is able to place his node in closer proximity to you or the seed nodes, he can optimize his chances of you getting a response from him faster than the honest nodes. This attack doesn’t need to rely on partitioning to work. Bob could be the owner of several block explorers, too, so even if Alice double-checked, Bob could still be able to trick her.

Bob may have even generated more blocks than 10. He could have 16 blocks. He would feed Alice 6 others using a 10-minute average Poisson distribution.

While this attack is in theory absurd, with enough money on the line, this attack could be executed.


Solution

Disable finalizing during the initial block download, and only enable it after the most active chain has been fully synced for x amount of hours.

Conclusion

The most fundamental principle of Bitcoin confirmation is proof of work, that is underpinned by proof of investment. By enabling the investment of miners to be sidestepped that fundamental principal is thrown out the window. It is now up to a central authority to decide and once you take that step there is no longer any need for a block chain. A MySQL database will achieve the same result.

This is an ill thought out change executed in an incredibly rushed and reckless manner with almost zero chance it was properly tested. The fact that a new consensus rule can be introduced in such a unilateral manner by a single developer is alarming. What is more alarming is that one developer can throw out the entire foundation of Bitcoin security without opposition. This is the future of ABC coin. In August last year Bitcoin died on the BTC chain with the introduction of Segwit. It survived in the form of Bitcoin Cash until yesterday when it was killed off again by Bitcoin ABC. If Bitcoin SV had not stood it’s ground and preserved the rules of Bitcoin in SV, yesterday would have been the last day Bitcoin existed in this world.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Dr. Craig Wright explains why Bitcoin needs to be stable

Last November 2, CoinGeek sponsored a Bitcoin BCH Miners Choice Summit at The Grand Harbour in Hong Kong. The dynamic half-day conference featured the industry’s most exclusive guest speakers, including nChain Chief Scientist Dr. Craig Wright.

In his presentation, Wright discussed what Bitcoin was meant to be, and why miners should support the original Satoshi Vision for Bitcoin by mining with Bitcoin SV and joining SVPool. He stressed the importance of not leaving the future to the developers who want to make major changes every six months and increasing its complexity.

“Bitcoin needs to be stable. It needs to be a system that won’t just be built on and changed every few days. To be stable as money, Bitcoin needs to be the same next year and the year after,” Wright told the audience. “It’s about a stable protocol, stable protocols matter. We want people in business, we want people to be able to take contracts and money and use it.”

Dr. Wright asked the audience to look to the future—a future in which mining companies held the same respect the banks used to before the financial collapse, saying miners should focus on creating businesses that can be passed down to their children rather than focusing on the get-rich-quick empty promises of ICOs.

Watch Dr. Craig Wright’s speech, “Back to the Future of Bitcoin: Why Miners Should Support Satoshi Vision,” below. You can also catch the nChain chief scientist along with other industry thought leaders at the upcoming CoinGeek Week Conference, happening on November 28-30 (with the exclusive, invitation-only Miners Day on November 27) in London.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Dr. Craig Wright explains why Bitcoin needs to be stable appeared first on Coingeek.

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