A prominent bitcoin cash startup has launched a mining pool designed to attack altcoins and BCH forks that it does not believe fulfill Satoshi Nakamoto’s original vision for the cryptocurrency.
SharkPool: Supporting Bitcoin Cash by Attacking other Networks
Dubbed “SharkPool,” the service aims to conduct a two-pronged attack on other cryptocurrency networks, exclusively mining empty blocks and then selling the profits for bitcoin cash (BCH).
In the announcement, the group said that it believes all cryptocurrencies except for its preferred version of bitcoin cash are “acts of war against Bitcoin” and that BCH supporters should attack them back.
“All alts, including forks and splits are acts of war against Bitcoin and are going to be treated as such. Shark Pool miner will exclusively mine empty blocks on alts and sell the profits for Bitcoin (BCH). We are looking for capable generals to hunt alts down at 0% poolfee!”
Shark Pool miners will exclusively mine empty blocks on alts and sell the profits for Bitcoin (BCH).
Sign up pre-release and get 100% of the blockrewards for a year! https://t.co/iNVI9qENx3 #EmptyYourBlocks
— SharkPool (@SharkPoolCash) November 6, 2018
SharkPool is operated by CashPay Solutions, the parent company of several bitcoin cash services including e-commerce platform Cryptonize.It, decentralized crowdfunding application Lighthouse, and the eponymous CashPay wallet.
Promoting the new mining pool, CashPay co-founder Ari Kuqi boasted that he planned to make good on his long-standing promise to “hunt down alts, ICO’s and shitcoins and burry [sic] them.”
“If you don’t have a seat at this table, you’re dinner,” he added.
I’ve been saying for a year I will hunt down alts, ICO’s and shitcoins and burry them. It’s time to deliver on that promise.
If you don’t have a seat at this table, you’re dinner.
Join @SharkPoolCash at https://t.co/qcZfcM9NdT
— Ari Kuqi (@ari_cryptonized) November 7, 2018
SharkPool is attracting miners with hardware compatible with a wide variety of different hashing algorithms, and it has not announced which cryptocurrency network(s) it will turn its attention to first. However, CashPay and Kuqi been outspoken about their views on the looming Bitcoin Cash civil war. In particular, they are vocal supporters of Bitcoin SV, the BCH implementation promoted by Craig Wright, Calvin Ayre, and their respective blockchain firms. By extension, they are fervent critics of Bitcoin ABC and the technical upgrades that ABC’s BCH clients will activate when the network hard forks on Nov. 15. Consequently, it seems that BCH — that is, the version supported by Bitcoin ABC — would be a likely initial target.
CCN has reached out to CashPay Solutions for comment and will update this article upon receiving a reply.
Breaking Down SharkPool’s Attack Plan
As outlined above, SharkPool plans to exclusively mine empty blocks and then sell the proceeds for bitcoin cash.
The second prong in that attack is simple enough. By converting all proceeds to bitcoin cash, SharkPool will concurrently provide BCH with consistent buy pressure while placing downward pressure on the prices of any other networks that it mines. However, the other component of SharkPool’s strategy requires a bit more explanation.
Why Miners Produce Empty Blocks
In Proof-of-Work (PoW) crypto networks, miners earn rewards for producing blocks and adding valid transactions to the blockchain’s public ledger. As long as new coins continue to enter circulation, the rewards come in two forms: coinbase rewards (i.e., the new coins generated in the block) and miner fees from the transactions included in the block.
Occasionally, a miner produces an empty block, which includes no transactions except for the coinbase transaction that distributes the block reward to the miner. That may seem counterintuitive since, assuming there are transactions in the memory pool (mempool), miners would be willingly forfeiting potential revenue.
However, as Bitcoin Unlimited developer Andrew Stone explained in a research paper on the subject, the economics and technical practicalities of cryptocurrency mining make the matter substantially more complex.
On the technical side, there are several time-consuming steps miners must perform before they can mine on top of a block produced by another miner. One of these steps involves downloading all the transactions from the previous block and removing them from their copy of the mempool. This prevents the miner from producing a block that includes transactions that were already in the previous block, which would render the new block invalid.
Hashing an empty block candidate gives the miner a head start since they would not need to wait to download the transactions from the previous block or update their mempool before they can begin searching for a new block. Consequently, when block rewards are high and transaction fees are low, miners are incentivized to mine empty blocks.
As Stone explained:
“Since mining pools maximize profit by maximizing the time their ASICs are hashing blocks likely to be added to the chain, some pools use this technique to construct a single-transaction block candidate to mine while they are waiting to fully receive and validate the newly found block. When the block is validated, mining pools typically use the available transactions to construct a block candidate that maximizes profitability and then switch their ASICs to mine that candidate.”
How SharkPool Will Use Empty Blocks to Attack other Crypto Networks
Though not a violation of the network’s rules, mining a high rate of empty blocks is frowned upon, especially when network activity is high and the number of unconfirmed transactions is growing.
On the Bitcoin network, more than 18 percent of all blocks mined have been empty, though this percentage has dropped dramatically over the years due to increased network activity and transaction fees, as well as the activation of upgrades that remove incentives to mine empty blocks. According to BTC.com, just 0.86 percent of blocks mined over the past year have been empty, though Bitmain-operated AntPool has an empty block rate as high as 2.12 percent.
By exclusively mining empty blocks, SharkPool aims not only to accrue block rewards that can be converted into BCH but also make it difficult for affected networks to process transactions. If the pool attracts enough hashpower, it could cause severe network disruptions by causing the number of unconfirmed transactions to pile up, which would, in turn, lengthen confirmation times and increase transaction fees. Such an attack would be especially potent if paired with a spam attack designed to clog the mempool further.
Moreover, depending on the size of SharkPool’s hashpower as well as the cumulative hashpower of the networks on which the pool is mining, it’s possible that the attack could grind smaller blockchains to a crawl if SharkPool waits until the network difficulty goes up and then redirects the attack to a new victim.
Images from Shutterstock
Follow us on Telegram or subscribe to our newsletter here.