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Bitcoin ABC protocol update makes attacks easier, more damaging: BitMEX




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Bitcoin Cash hard forked on November 15, resulting in Bitcoin ABC and Bitcoin Cash SV [BCHSV]. The Bitcoin ABC protocol updated to version 0.18.5, on November 21. BitMEX analyzed the changes implemented and concluded that the ABC checkpointing system is a “fundamental change to the core network and consensus dynamics”, changes whose implications needed to be better understood before implementation.

The new ABC mechanism finalizes a block once 10 confirmations are received. This prevents large reorganization blockchains. Meaning, if a hostile mines a “shadow chain” that differs from the original over 10 or more blocks, this shadow chain is useless, and can not reorganize the original “honest” chain. However, the risk of consensus chain split seems much aggravated.

BitMEX notes that this consensus chain split is as damaging as a hostile reorg. However, such a split is unlikely to occur as the hostile miner needs to have majority of the hashrate to pull this off.  The consensus split would not necessarily result in the hostile profiting. A double spend attack attempted this way does not have a clear outcome.

According to BitMEX Research:

“[the new system] increases the risk of consensus chain splits and provides new opportunities for a would-be attacking miner. Another tradeoff is that the change increases the damage hostile miners can do to the network, but it reduces the potential reward for such behaviour.”

BitMEX says merchants and exchanges can wait for 10 block confirmations, before treating a transaction as “secure”. However, it fails the Bitcoin Cash original objective of increasing transaction speeds. The Bitcoin whitepaper, treated as “Satoshi’s vision”, stated:

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

Despite this, working under above conditions it is very easy for a hostile to “take over” a new node, if it receives a checkpoint from a shadow chain first, and the honest chain’s later.