Bitcoin Cash SV, the hard forked chain of Bitcoin Cash created by a camp composed of CoinGeek, Calvin Ayre, and Craig Steven Wright, suffered a block reorganization.
However, as reported by Bitcoin Unlimited chief scientist Peter Rizun, CoinGeek allegedly reorganized its own blocks.
Emin Gun Sirer, a professor at the prestigious Cornell University, stated that in a decentralized blockchain protocol, a self-block reorganization should not be possible.
Heavy Criticism Against Reorg
2. This should not be possible in a decentralized system. You can only invalidate your own block and create a new tail if you’re the majority miner. BSV is a centralized coin.
Why do they bother with mining. They are clearly no good at it. Use Oracle on Craig’s laptop.
— Emin Gün Sirer (@el33th4xor) November 19, 2018
The motivation behind the self-reorganization of SV blocks initiated by CoinGeek remains unclear, especially given that major cryptocurrency exchanges like Kraken had already signaled that SV was on a short leash.
Cornell professor Emin Gun Sirer stated that the ability to invalidate one’s own block suggests the system employed by SV is both centralized and poorly designed.
“More The miner who overwrote block 557301 was the same miner who overwrote it in the first place. BSV have no idea what they are doing. You all knew this. Don’t invest with a conman. Not much else needs to be said on this front. This should not be possible in a decentralized system. You can only invalidate your own block and create a new tail if you’re the majority miner. BSV is a centralized coin.”
He further emphasized that the development team behind SV does not understand the consequence of its actions and the indication of a highly centralized move to self-reorganize a block.
“Their blockchain’s tail just got rewritten, as if someone ripped out the last few pages and wrote over them. This is an indication that their system parameters are outside the safety envelope of their network. In short, they don’t know what they’re doing.”
Since the hard fork on November 15, the price of Bitcoin Cash SV has dropped from $170 to $66, by more than 61 percent. The cryptocurrency exchange market as a whole dropped substantially in value, but, in contrast, Bitcoin dropped by around 30 percent, and Bitcoin Cash (ABC) dropped by 33 percent.
Risk of Delisting
As a consequence of the controversial decision to reorganize two blocks without solid reasoning to justify the action, Bitcoin Cash SV now faces delisting on several exchanges that fear network instability.
The Kraken team stated prior to the SV block reorganization that investors should be concerned about various red flags surrounding SV.
“Bitcoin SV does not meet Kraken’s usual listing requirements. It should be seen as an extremely high risk investment. There are many red flags that traders should be aware of,” the Kraken team said, citing the lack of support from wallets, miners, block explorers, and representatives threatening other communities.
“Custodial losses taken on due to attacks originating from nChain or its affiliates will be socialized among all BSV holders on Kraken. Given the volatile state of the network and threats that have been made, Kraken cannot guarantee perfect custody of BSV,” the team added.
Many exchanges have already expressed concern towards SV due to miners mining the asset with millions of dollars in losses. Controversial activities on the SV chain could trigger other major exchanges to consider delisting the asset in the near future.
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