‘Satoshi Nakamoto’ is Mining Cryptocurrency Again: Bitcoin Cash Attack Imminent?
For the past week, an unknown miner going by the name Satoshi Nakamoto has been mining cryptocurrency again – and it’s not Bitcoin.
In fact, this ‘Satoshi’ is currently in control of close to 40% of the Bitcoin Cash (BCH) hashrate, as per data from Coin Dance. That percentage is up from this time last week, when the same miner had roughly 35% of the hashrate.
Some have speculated this is the beginning of the second chapter of the hashwars – a conflict that began last year during the Bitcoin Cash/Bitcoin SV hardfork. This theory suggests the ‘Satoshi Nakamoto’ currently mining BCH is in fact Bitcoin SV cheerleader and prominent ‘Faketoshi’, Craig S. Wright.
Bitcoin Cash (BCH) Mining Dominated by ‘Satoshi Nakamoto’
Around a week ago an unknown miner calling themselves Satoshi Nakamoto began hogging more than 35% of the BCH hashrate. By Monday morning their mining dominance on the Bitcoin Cash blockchain peaked as high as 44%. When a miner acquires 51% of a blockchain’s hashrate, they can launch double-spend attacks – essentially stealing Bitcoin Cash coins.
Suspicion immediately fell on self-proclaimed Satoshi Nakamoto, Craig S. Wright, and his Bitcoin SV cohorts: Calvin Ayre and CoinGeek. One user on the Bitcoin Cash subreddit proposed that the BSV crew were trying to manipulate the price of BCH:
“I’m willing to bet it’s hashpower ran by Coingeek et ell which is trying to pull the same trick as before: first amass BCH by mining it over time, then trying to “flip” it with the state-friendly BSV by exchanging all the mined coins at once for BSV, thus triggering a crash in the BCH price while attracting money from speculators into BSV.”
This unknown miner originally appeared a week ago under the name ‘BoomBoomBoom’, as detailed in this reddit post. There’s no way to prove that ‘BoomBoomBoom’ and ‘Satoshi Nakamoto’ are one and the same, however one disappeared when the other appeared, and the likelihood of two unknown miners suddenly hogging the hashrate within days of each other seems unlikely.
Re-Org Protection and the Possibility of Attack
In November 2018 during the Bitcoin Cash hardfork, the BCH blockchain was altered to protect against possible attacks from the Bitcoin SV team. Known as re-org protection, this stops attackers from reorganizing the blockchain and creating a new illegitimate chain.
With re-org protection in place, this possibility doesn’t seem too likely at the moment. That said, there’s still a chance that small, disruptive attacks could be launched with the aim of destabilizing the Bitcoin Cash ecosystem. As one redditor suggested:
“My guess is they will go for a minor re-org (maybe 6 blocks) to claim that BCH is no better than BSV, even though they self-inflicted their re-org. They’d be doing this for purely for show, for bad PR against BCH, unless they are really mining to sustain their BSV operations.”
Manipulating Bitcoin Transaction Fees
If all of this seems far too conspiratorial… it doesn’t get much better. Another theory suggests former Bitcoin (BTC) miners have decided to ‘game’ Bitcoin transaction fees by abandoning mining operations and subsequently raising fees. The miners would then move back to Bitcoin at an opportune moment, and collect all of the high-fee transactions that had accrued.
Yet another theory proposes that this ‘Satoshi Nakamoto’ is actually a Bitcoin Cash supporter purposely attempting to raise Bitcoin transaction fees. This theory held more weight five days ago – when ‘Satoshi’ began mining, and BTC fees were elevated. But since then BTC fees have actually fallen by over 60%.
The Bitcoin Cash hardfork saga continues.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.