Background - http://www.coindesk.com/bitcoin-exchanges-unveil-emergency-hard-fork-contingency-plan/
It's been under discussion in slack most of the evening, here is the current draft version of the response letter from BU. Please feel free to offer suggestions, comments, etc, PM me if you feel like doing that instead.
If you are a Bitcoin Unlimited Member and you are happy with how it is then post an YES, or a NO if you don't like it at all (including suggestions with a NO is most welcome).
If a majority agree then it will be forwarded to Peter.R and relevant crypto news media outlets contacted with the response.
I would like to give this a 24 hour window before forwarding it on, responses in that time would be greatly appreciated. By a 'majority', I mean a majority of replies (as many BU members might not see/respond).
---------------------------------
Dear Community and respective exchanges,
We are happy to hear that exchanges are making preparations to safely handle a transition to a >1MB block chain. We agree that it is important to minimize the risk of such a split through appropriate planning and preparation. We share your goals of ensuring a smooth transition, protecting users, and avoiding confusion.
We encourage you not to list the coins of a minority chain post-fork as BTC (XBT). Although you desire to remain neutral as the market determines which fork shall be declared Bitcoin, this would send a very strong message to end users that the minority chain is still Bitcoin and that it would be safe to use.
This is not the case, as the minority chain will need considerable time for a mining difficulty adjustment. The combination of high difficulty, low hashrate, a 1 MB block size limit, significant exposure to a 51% attack risk, and volume will severely congest transaction capacity on the minority chain. End-users will find it exceedingly difficult to make any transactions.
Nodes currently consider the valid chain with most proof of work the correct one, and will keep extending that chain regardless of the size of specific blocks below the historic limit of 1MB.
Not only would this be detrimental to the current user experience, but it would also be viewed as a disaster by the outside world looking in. End users, mistakenly guided to believe that the minority chain is still Bitcoin, may incur significant financial damages.
The probability of a minority hashpower catching up diminishes exponentially as subsequent blocks are added.
We understand and accept the need for respective exchanges to safeguard the monies of their customers during a potentially turbulent coin split. Thus, we encourage you to use the identifiers BTC-c (or XBT-c) and BTC-u (or XBT-u) for coins on the minority and majority chains, respectively. As already stated, the identifier BTC (or XBT) can be assigned to the dominant coin at a later, more appropriate time.
The majority's choice is represented by the chain which has the greatest proof-of-work effort invested in it. This chain will grow the fastest and outpace any competing chains.
We would ask that exchanges, for the benefit of their customers and the bitcoin sector, clarify what they consider as Bitcoin. Whether it is defined by the majority hash rate, or defined by the Core development team. This will enable end users, in the event of a fork, to make better decisions as to whether they wish to trade on a less secure ever diminishing minority chain, or to continue to trade on the majority chain.
With regards to replay risk, we feel the topic is too big for this initial response and we will provide a clear guide on how exchanges can best protect against this in the coming days.
"The probability of an attacker catching up from a given deficit is analogous to a Gambler's Ruin problem."
It might also be prudent for exchanges to notify users as to whether it is defined by the SHA256 majority hash rate if the PoW of the minority chain is changed by Core development.
Sincerely,
Bitcoin Unlimited
-----------------------------------------
Quotes is from - https://www.bitcoin.com/bitcoin.pdf
-----------------------------
edit notes will be below this;
fixed grammar in replay paragraph
quotes placed in italics
made more changes, as per my post lower down in this thread
It's been under discussion in slack most of the evening, here is the current draft version of the response letter from BU. Please feel free to offer suggestions, comments, etc, PM me if you feel like doing that instead.
If you are a Bitcoin Unlimited Member and you are happy with how it is then post an YES, or a NO if you don't like it at all (including suggestions with a NO is most welcome).
If a majority agree then it will be forwarded to Peter.R and relevant crypto news media outlets contacted with the response.
I would like to give this a 24 hour window before forwarding it on, responses in that time would be greatly appreciated. By a 'majority', I mean a majority of replies (as many BU members might not see/respond).
---------------------------------
Dear Community and respective exchanges,
We are happy to hear that exchanges are making preparations to safely handle a transition to a >1MB block chain. We agree that it is important to minimize the risk of such a split through appropriate planning and preparation. We share your goals of ensuring a smooth transition, protecting users, and avoiding confusion.
We encourage you not to list the coins of a minority chain post-fork as BTC (XBT). Although you desire to remain neutral as the market determines which fork shall be declared Bitcoin, this would send a very strong message to end users that the minority chain is still Bitcoin and that it would be safe to use.
This is not the case, as the minority chain will need considerable time for a mining difficulty adjustment. The combination of high difficulty, low hashrate, a 1 MB block size limit, significant exposure to a 51% attack risk, and volume will severely congest transaction capacity on the minority chain. End-users will find it exceedingly difficult to make any transactions.
Nodes currently consider the valid chain with most proof of work the correct one, and will keep extending that chain regardless of the size of specific blocks below the historic limit of 1MB.
Not only would this be detrimental to the current user experience, but it would also be viewed as a disaster by the outside world looking in. End users, mistakenly guided to believe that the minority chain is still Bitcoin, may incur significant financial damages.
The probability of a minority hashpower catching up diminishes exponentially as subsequent blocks are added.
We understand and accept the need for respective exchanges to safeguard the monies of their customers during a potentially turbulent coin split. Thus, we encourage you to use the identifiers BTC-c (or XBT-c) and BTC-u (or XBT-u) for coins on the minority and majority chains, respectively. As already stated, the identifier BTC (or XBT) can be assigned to the dominant coin at a later, more appropriate time.
The majority's choice is represented by the chain which has the greatest proof-of-work effort invested in it. This chain will grow the fastest and outpace any competing chains.
We would ask that exchanges, for the benefit of their customers and the bitcoin sector, clarify what they consider as Bitcoin. Whether it is defined by the majority hash rate, or defined by the Core development team. This will enable end users, in the event of a fork, to make better decisions as to whether they wish to trade on a less secure ever diminishing minority chain, or to continue to trade on the majority chain.
With regards to replay risk, we feel the topic is too big for this initial response and we will provide a clear guide on how exchanges can best protect against this in the coming days.
"The probability of an attacker catching up from a given deficit is analogous to a Gambler's Ruin problem."
It might also be prudent for exchanges to notify users as to whether it is defined by the SHA256 majority hash rate if the PoW of the minority chain is changed by Core development.
Sincerely,
Bitcoin Unlimited
-----------------------------------------
Quotes is from - https://www.bitcoin.com/bitcoin.pdf
-----------------------------
edit notes will be below this;
fixed grammar in replay paragraph
quotes placed in italics
made more changes, as per my post lower down in this thread
Last edited: