Hash War is On: Craig Wright Threatens to Crash Bitcoin Price Down to $1000

Hash War is On: Craig Wright Threatens to Crash Bitcoin Price Down to $1000

November 15, 2018

In his tweet, Wright warned Bitcoin miners that, if they continue their support for the Roger Ver/Jihan Wu (Bitmain)-backed Bitcoin Cash ABC (BCH) over his Bitcoin Satoshi’s Vision (BSV) project, he would be look to fund his side of any ensuing ‘hash war’ battle by selling off Bitcoins.

To all BTC miners…

If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.

Think about it. We will sell A Lot!

Consider that….
And, have a nice day

(BTC to 1000 does not phase me) pic.twitter.com/oUScEahtWc

— Dr Craig S Wright (@ProfFaustus) November 14, 2018

Bitcoin’s price has fallen more than 12 percent over the last 24 hours to $5,400, the lowest price for the popular cryptocurrency in more than a year. At the time of writing, it grew a bit to $5,637. The cryptocurrency market cap plunged by nearly 15% making its new 2018 low of $180 billion, according to CoinMarketCap. This market correction is widespread across the entire crypto market. It is visible that almost all of the top-twenty cryptocurrency have lost 10-12% of their price in the last 24-hours.

This plunge seems to be the part of a broader cryptocurrency sell-off. Ethereum has fallen more than 15 percent over the last 24 hours, while Bitcoin Cash is down 18 percent.

Day the before the warning, the data from Coin Dance showed that Bitcoin Cash mining pools will run a new version of the software Bitcoin SV. Bitcoin SV is the Bitcoin Satoshi Version, an alternative to the most widely used network Bitcoin ABC. Early trends suggest that Bitcoin SV will pull 76.39 percent of the network’s existing mining power. However, it is still early to tell whether the BCH miners will update their computers to run the Bitcoin SV software.

However, the warning that Wright is willing, and presumably able, to crash the price of Bitcoin in pursuing of his happiness with the position of the Bitcoin Cash, is just the latest add-in of a “fork war” that lately took place  between the two sides of an increasingly deep difference in opinions.

E-Mail Fork Wars

Just for a reminder, Bitcoin hard forked in August of 2017. The Bitcoin development team then has disagreed internally over how Bitcoin should scale. Should Bitcoin continue using small blocks, or move to larger block size to accommodate transaction traffic.

Thus, Bitcoin Cash was born – a cryptocurrency based upon larger block size for scaling. The two camps parted ways. Most notably, Craig Wright (claims to be Satoshi Nakamoto) and Roger Ver broke off toward Bitcoin Cash evangelism. Since August of 2017, many Bitcoin Cash followers have expressed their views to the public. Views that lobby BCH as the prime candidate for crypto use and adoption.Roger Ver is famous for his efforts to further BCH as the go-to crypto payment option.

As we have already wrote, there are two tribes. The Bitcoin ABC camp has the clear majority of supporters (10 to 1 according to Ver estimates) and Bitcoin SV (Bitcoin Satoshi’s Vision) which is mainly supported by Craig Wright and Mr. Calvin Ayre. Roger Ver is a fervent backer of Bitcoin ABC. Last week, early cryptocurrency Roger Ver said that he is having second thoughts about his former alliance with Wright.

Apparently, Roger’s decision outraged Craig Wright who sent a threatening email to Ver. Roger Ver then showed what appears to be a screenshot of the email mentioning the threats and insults that Wright wrote to him, among other things for questioning whether he was Satoshi Nakamoto:

“If you want a war…
I will do 2 years of no trade. Nothing.
In the war, no coin can trade.
If you want ABC, you want shitcoins, welcome to bankruptcy.
It was nice knowing you.
Bitcoin will die before ABC shits on it. I will see BCH trade at 0 for a few years. Will you?
Side with ABC, you hate bitcoin, you are my enemy. You have fucking no idea what that means.
You will.
I AM Satoshi. Have a nice life. You will now discover me when pissed off.
And, no. You Could have had proof. Your choice.
Fuck you,
Craig”

According to Roger, Craig’s immature attitude is a far away from the civilized, objective manner in which Calvin Ayre addressed him in an e-mail acknowledging that there is a divergence of opinion between the two:

“ What Craig wrote is not the sort of thing that a forty-something-year-old man, that a mature businessman would say.
In contrast, Calvin Ayre I like. Calvin ayre sent me an email where he writes there was disagreement here, and he said something along the lines: Roger, whenever you’re ready to rejoin the camp that supports economic freedom, we are here; we’re ready for you …

That seems like something a sane person would say.”

He kept on on to criticizing Wright’s personality, confirming that he agrees with Vitalik Buterin and his views on Wright’s claims to be the real Satoshi Nakamoto:

“I’ll close this video with a point made by Vitalik Buterin, another one of these absolute geniuses that the crypto-coin ecosystem is so lucky to have: In reference to Craig he said that if it turned out that Craig was Satoshi, it would lower his opinion of Satoshi, (but) it wouldn’t improve his opinion of Craig… And I think I agree with Vitalik on that point.”

Just a Little Bit of History Repeating

It is possible history will repeat itself somewhat? Miners may switch back-and-forth between Bitcoin ABC and Bitcoin SV, depending on which coin has the highest value. Wright obviously wants to keep Bitcoin Cash and potentially roll it back to be closer to the original Bitcoin protocol, without any of the big proposed changes (some of which he alleges makes the cryptocurrency, ‘illegal’). His major change, though, would be to mine larger blocks, and then increasing the potential scale of the network by growing that block size later, maybe even removing the limit altogether eventually.

Larger block mining, however, is seen as benefiting better-equipped, better-funded mining concerns, and as a contributory factor to ultimately centralizing a network in the hands of larger business concerns.

This move, which some see as an aggressive move, is to Wright “part of the protocol,” which allows it to happen. The threat of such an attack is so real that a group of miners have grouped together to form the SharkPool and revealed they will “exclusively” mine empty blocks.

Shark Pool is the non-official name for the mining pool that will mine empty blocks on altcoins and BCH forks to make payouts in BCH. He declined though that he stands behind this idea, but he acknowledges it as “great”.

“That is a perfect libertarian answer to scams. Cleanse the shitcoins. It’s a self-regulated good and naturally profitable. It will drive them into the ground and be self-sustaining. It doesn’t require government or a policing body. When you look as something like the NASDAQ, they’re not a government, but they have the rights of government. You break their rules and you’re off the platform. The world needs more of that.”

Economy  Support ABC, Most Exchanges Shutting Down BCH Trading

Currently, it seems that Bitcoin SV have possession of the majority of the Bitcoin Cash Hash Power (the raw processor power used to mine blocks). If it use that power to mine empty blocks on the Bitcoin ABC chain rather than its own, it could essentially stop transactions and render its opponent useless via a 51%-style attack. Thus, all the support in the world will offer no real support under the growing weight of the invalid transactions.

Jonathan Bier, head of research at BitMex, said:

“The chain will split in two, but the economy will support ABC and reject SV (Satoshi’s Vision),” which is Wright’s version,  If major exchanges don’t list Wright’s token, that could pressure its price. SV will have a low price and miners will leave it in a few weeks. That is my prediction.”

This prediction is probably based on the reality of the situation rather than personal feelings regarding the technicalities of the upcoming hard fork. It is an informed and wizened view. The economic majority in a cryptocurrency is, in real terms, as important as the mining majority. There are a lot of reasons for this, not the least of which is the cost of the hardware involved in mining cryptocurrencies.

Billionaire Calvin Ayre, who controls rival mining giant CoinGeek and is an ally of Wright, said he plans to ask exchanges to only list his coin as true Bitcoin Cash.

“If they do go their own way we are going to lobby all exchanges, since they are forking away from Bitcoin technology, that they should not be able to keep the Bitcoin name and create market confusion.”

Most exchanges are shutting down trading in Bitcoin Cash while things sort themselves out, and to avoid the kind of double spend problems that cost some of them money during the Ethereum/Ethereum Classic split. It will remain to be seen how it all plays out – is it just a bluff or is it a bad-moon-arising.

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