Bitcoin Cash SV Unreliable for Network Users? Two Chain Reorgs Occur

Both Blockchair and BitMex Research have identified chain reorgs which have taken place in the Bitcoin Cash SV network. Chain reorgs decrease the reliability of payments made on the network while also decreasing the security while the chain forks.

Key Takeaways

  • Evidence builds that the Bitcoin Cash SV network is unprofitable for miners and unreliable for users 
  • Two chain reorgs took place recently, initially a three-block reorg which was followed by a six-block reorg that reverted back to the initial chain.
  • Large block sizes increase the risk of chain reorgs occurring

Bitcoin Cash SV has been increasingly in the spotlight recently. Commotion over Craig Steven Wright’s claims that he is Satoshi has been reignited and several top cryptocurrency exchanges have removed Bitcoin Cash SV from their listings.

Questionable Payment Reliability after Reorgs?

Amid all of this, two significant chain reorgs have taken place. The chain reorgs were pointed out initially on Twitter by Blockchair lead developer Nikita Zhavoronkov (@nikzh).

A chain reorg occurs when there are two competing chains that cause a forking in the network. The blockchain is eventually reorganized to represent the blockchain with the most proof-of-work which then excludes the blocks from the competing chain. 

Excluded blocks are labelled orphan blocks. Such blocks can be detrimental for network users, decreasing the reliability of payments.

Source: Bitmex Research

The main chain initially reorganized three blocks at 13:05 GMT, resulting in two forks running simultaneously. The chain later reverted back to the original chain at 14:12 GMT, reorganizing six blocks.

Such forking is also poor in terms of network security with hashing power split as local clients are in disagreement over which chain represents the largest proof-of-work. This increases the probability of a 51% attack taking place.

It was later noted by Bitmex Research that all of the TXIDs from the competing chain made it to the main chain ensuring network users that no double spend attacks took place amid the confusion. However, the orphaned blocks from the competing chain will no longer show on the Bitcoin Cash SV as they are no longer part of the main blockchain.

The large block sizes of the Bitcoin Cash SV network has been noted as the reason for the chain reorganizations. Nikita Zhavoronkov noted that “Almost each time someone is trying to produce a very large block on the $BSV chain, there’s a reorg”.

Chris Pacia, CEO of OpenBazaar, has previously noted the problem with large blocks based on his observations of the Bitcoin Unlimited testnet:

BSV had ONE 128mb block and it caused a six-block reorg. On the BU [Bitcoin Unlimited] testnet sustained 128mb blocks caused a total breakdown of the chain where there were so many reorgs that every node had a different view of the state of the blockchain”  

When the mempool of connected nodes in a network with large block sizes becomes out of sync, the probability of a chain reorg occurring increases. The size of the blocks increases the time it takes for such nodes to download transactions and communicate their blocks to other nodes, increasing the possibility of miners progressing their proof-of-work with different chains.

What does all this mean for Bitcoin Cash SV? 

As noted by Bitmex Research, there are several implications for the Bitcoin Cash SV network:

  • The network is not reliable for payments
  • The block size limit is too large 
  • The network latency is too high

In light of this new information, the evidence continues to stack up that Bitcoin Cash SV is unprofitable for miners and unreliable for network users. Research from Bitmex calculates miner losses to be at least $2.1 million since the network launch while the large block sizes also make the network unreliable for payments.