A Look at Sharkpool's Mission to Break Altcoins for Bitcoin Cash (BCH)
A new project known as Shark Pool aims to destroy altcoins by flooding their networks with empty blocks, taking the mining rewards and then converting them to Bitcoin Cash.
“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),” the pool’s site says.
— Ari Kuqi (@ari_cryptonized) November 6, 2018
Shark Pool is currently an invite-only operation at a pre-launch stage that recruits miners based on what algorithms they can contribute hashing power.
Ari Kuqi, the co-founder of CashPay.Solutions—the parent company that created Shark Pool—transparently bashed altcoins in a tweet last week, promising to “hunt down alts.”
If you don’t have a seat at this table, you’re dinner.
— Ari Kuqi (@ari_cryptonized) November 7, 2018
At this point, it’s safe to say that the movement behind Shark Pool is political in nature, using BCH maximalist language, calling the coin “Bitcoin” without the “Cash” attached to the name, and seeking to sabotage competing networks.
Whether it succeeds or not depends on how much hashing power the pool could generate for any particular altcoin in the first place.
Why empty blocks?
To make mining a bit more streamlined, some pools choose to “discover” a new block with the only minimum requirement necessary to build it—a Coinbase transaction. This activity sometimes results in an empty block being added to the chain, creating new units of a cryptocurrency in the form of mining rewards.
Most of the time, empty blocks are rare enough that they do not impact the overall value of the coin. Some mining pools choose to add such blocks to a network to gain easy money without having to wait for the next full block to come, but their impact on the network is not malevolent, with miners often just holding onto the coins that they earn through this process.
Shark Pool’s strategy, on a theoretical level, could be devastating to smaller coins. If it manages to take over most of the hash power, it can swing its weight around to grab as many of the new coins generated in the network as possible.
The next step in this plan, obviously, is the transformation of these coins to BCH, effectively selling off any added value that these new coins could have had in the network. It dilutes the market capitalization of the coin itself while pumping up the value of BCH on a coin-to-coin basis.
What are the odds of success?
If Shark Pool wants to get serious about getting rid of altcoins, perhaps the most important demarcation line would be Litecoin, one of the oldest and largest altcoins in existence.
Using LTC as an example, it’s a simple matter of “plugging in the numbers” to determine just how far Shark Pool has to climb to threaten the coin. LTC’s hashrate is almost equal with Ethereum’s, just to provide some perspective.
At a total rate of over 200 terahashes per second, it’s going to require roughly 227,000 high-performance GTX 1070 graphics cards working in conjunction to overtake the current pool output of LTC.
The fact that Shark Pool isn’t focused on one particular coin means that its resources will likely be spread thin. Even if it managed to conjure an enormous fleet of GPUs and ASICs, the chances of mining enough empty blocks to undermine the network aren’t great.
Although the project provides an interesting thought experiment, it will likely amount to no more than that.
Cryptovest attempted to contact Shark Pool’s parent company for more details, but so far has received no reply.