ViaBTC Loses Hash Power; Impact on Bitcoin Core
In a controversial announcement, major bitcoin mining pool ViaBTC publicly stated that all of its hash power will be allocated to mining Bitcoin Unlimited blocks, a hard fork proposal intended to increase the block size to a capacity that miners agree on.
Since the initial announcement on October 10, ViaBTC continued to create controversy over their questionable statements and discussions, which included their claims that SegWit and Lightning Network must be prevented as they fail to represent the values of Bitcoin and solve scalability issues.
Earlier this month, ViaBTC wrote, “Lightning Network is not Bitcoin,” and later added, “I’m [ViaBTC] not trying to stop SW [SegWit], trying to prevent SW and LN [Lightning] from being passed through as the only scalability solution for Bitcoin.”
The issue with ViaBTC’s public protest was, bitcoin soft forks require a consensus of 95 percent of hash power from miners. Thus, with ViaBTC’s 11 percent of the bitcoin network’s hash power, Lightning and SegWit essentially cannot be integrated and implemented.
While it is still difficult to speculate whether it was ViaBTC’s public announcement to prevent SegWit activation that led to the rapid decline of its hash power, the former fifth largest bitcoin mining pool recently lost a significant amount of hash power.
According to various sources, including Blockchain.info and CoinDance, ViaBTC has lost nearly 30 percent of their hash power, which has declined from around 11.5 percent to below 6 percent. At the time of writing, it is at 5.7 percent but due to many variables that could affect hash rate distribution, it is difficult to establish the exact number.
On certain time periods, the hash power of ViaBTC went well below 120 petahashes, reaching 109 petahashes at one point.
Due to ViaBTC’s loss in hash power, the number of Bitcoin Unlimited blocks significantly decreased as well, as seen in the infographic below.
While support for Bitcoin Unlimited has significantly declined over the past week, the number of nodes that has activated SegWit support has increased. Within a few hours after the release of Bitcoin Core 0.13.1, 10.5 percent already upgraded their nodes suggesting strong initial support for SegWit and other Bitcoin Core scaling solutions.
At the moment, it is safe to assume that the market and community are siding with Bitcoin Core and at this rate, it is highly likely that Lightning will be activated by the community as well.