Bitcoin Cash Block Difficulty Adjustment Analysis

The birth of Bitcoin Cash (BCH, BCC) is quite interesting as miners are coming and going quickly. In this post, I will explain how the difficulty of the BCH blockchain will change in the next 10+ blocks.

How BCH is redirected

BCH has a very special rule about when to adjust the difficulty down. The rule is as follows:

Median Time Past (MTP) of the current block must be approximately 12 hours away from the MTP of the previous 6 blocks.

If this condition is met, the difficulty of creating PoW will be reduced by 20%. In other words, it will be 20% easier for miners to find blocks.

MTP is just the median value of the last 11 blocks. That is, sort the last 11 blocks in chronological order and pick the middle one. This method is used because sometimes, the timestamp of a block mined later is very early (due to some technical reasons that lead to different block times).

The key to MTP is that we can calculate it before the block is found by a miner. Because we see the timestamps of the last 11 blocks and pick the middle block, we don't need to know the timestamps of future blocks exactly, just the first 6 blocks. Most MTPs are just the block timestamps of the previous 6 blocks.

plan

The following diagram may help to understand:

in conclusion

There are still a lot of blocks to be mined, but even if they are mined immediately, we will have 6 difficulty adjustments between blocks 478577 and 478582. This will reduce the block difficulty by 20%, so we will get blocks with (0.8⁶ ~ 0.262) x 100% difficulty. This means that miners will need to put in about 1/4 of the work to mine a BCH block.

This might explain why there was a 13 hour gap between block 478570 and block 478571. The miners might just be trying to make this chain easier to mine!