TLDR: honest miners use their hashpower to mine coins on the chain they value, giving it protection and increasing the value of the coins they are mining. Diverting hashpower from the chain you value to point it instead at a chain you don't with the intent to destroy it, earning coins that you hope to make worthless, and wiping out thousands to millions of your current customers, is dishonest mining.
(I can't believe this needs saying or explaining, but such is the current state of the Overton Window on this issue.)
In the run up to the SV split, a new narrative arose which I had never encountered.
This new narrative was that majority hashpower should not be content merely to extend and protect the chain they value most. Under the new narrative, majority hashpower has a moral duty to kill minority chains.
Let's take a moment to think this through.
Alice is a miner on the majority fork. According to this new theory of mining honesty, Alice should divert her hashpower away from the majority chain, which she supports, and where her hashpower earns her a reward that is paid in coins that she hopes will become ever more valuable.
Instead of protecting the chain she supports and earning coins on it, Alice should point her hashpower onto a chain she doesn't support, and use her hashpower destructively, earning coins she doesn't want and which she hopes to make valueless. By doing so, Alice will somehow improve things for the chain she supports, but which she is not protecting or earning coins on.
Hopefully it's become clear what the problem is: the incentives. When Alice mines on the "enemy chain" in the hopes of harming it, she quits earning in the coins she values. Instead, her competitors earn those coins. Alice instead earns "enemy coins" which, if her attack succeeds, are worthless. So if Alice conducts this attack she is strictly worse off than her competitors who don't. She is basically burning money while they're earning money.
But if Alice succeeds, then what? Let's assume the death of the enemy coin causes Preferred Coin to become much more valuable (more on that improbability later). Alice and her competitors all share in the reward.
Alice could long Preferred Coin and short Enemy Coin. But so can competitors. In fact the market is already doing this: the reduced security of a minority chain is priced into that coin's futures. At least, it should be. So while Alice can profit from her inside information that she is in fact going to conduct an attack at a specific time, the market has already priced in some likelihood of this happening. This limits Alice's ability to profit from this attack.
But let's back up.
Miners, in general, prefer a diverse cryptosystem. In fact the BTC / BCH split was incredibly good for SHA256 miners. More coins competing reduces risk if any one fails, or if a particular coin creates a game changing feature that isn't easily replicated on other coins.
And let's think through what would happen in a wipeout attack of some sort.
Bob is all-in on Enemy Coin. He earns, saves, and spends in Enemy Coin. Turns out Bob really is a true believer in Enemy Coin technology. He hangs out in r/EnemyCoin all day scolding the trolls and shilling Enemy Coin like a good Ecoiner.
Along comes Alice with her amazing wipeout attack. Boom. Bob is now destitute. Alice starts to celebrate, then stops suddenly.
How is Alice better off with Bob broke? He has no money now with which to buy Preferred Coin. And besides even if Bob earns more, Bob will never buy Alice's coins and will tell everyone Alice is a really bad person. Bob may even consider legal action against Alice for this act of financial vandalism.
If I were Alice, I would strongly question whether or not I am actually better off with Enemy Coin holders being wiped out. How am I better off if thousands or millions of crypto holders - my target customers - get suddenly poorer - or even financially vaporized (and my what a hurtful news cycle that would generate).
So I think it's clear. Alice is made worse off vis a vis her competitors because she's earning coins she's quickly driving to zero, and moreover, she and the rest of the miners will likely be quite worse off if they wipe out some percent of their customers. It would literally be "deleting wealth out of the crypto-economy." The only people better off would be the bankers and the buttcoiners.
Really, what would be best for Alice if she really believes in Preferred Coin is to mine Preferred Coin and earn more of them. Instead of attacking Enemy Coin, she should spend any of her additional resources making Preferred Coin or its ecosystem better, and convincing Enemy Coin holders to give Preferred Coin another shot.
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source https://www.reddit.com/r/btc/comments/a91ryz/the_new_subversion_honest_miners_sometimes_must/
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