Don’t believe the FUD: How Bitcoin SV block reorgs, orphans affect you
There’s no shortage of anti-Bitcoin SV (BSV) propaganda spreading FUD (fear, uncertainty and doubt) about reorgs and orphans. But in reality, these features of BSV are far from the bogeymen they are made out to be.
Reorgs and orphans have been the subject of countless scare stories in recent weeks, some suggesting BSV is “faulty” or that user funds could be at risk. But increasingly, users are being advised not to believe the FUD.
In a blog post, crypto advisory firm Bitstocks set out to explain how reorgs are, in fact, a natural event in healthy blockchains, as per the Nakamoto Consensus.
“In plain language, a block reorg event is a normal part of the Nakamoto Consensus mechanism that solves the double-spend problem of distributed systems. For each new batch of transaction ordered, miners compete to solve an intricate computational problem, known as a ‘hash,’” according to the Bitstocks blog post. “The first miner to find the correct solution and broadcast it to the network earns the right to record the latest batch of valid transactions to the blockchain. In return, they receive a block reward (a combination of transaction fees and newly minted Bitcoin).”
The principle that the longest valid chain is the official one creates orphans in instances where two or more miners temporarily split the network. Far from creating a security risk, orphans validate the integrity of the blockchain more effectively.
Bitstocks noted, “There are also occasions where two different miners reach the finish line so close together, that the network is temporarily split on calling the tie. There are now two competing versions of the blockchain with slightly different endings. In these scenarios, the Nakamoto Consensus rule of ‘the longest valid chain is the official one’ comes into effect.
“The nail-biting competition is usually settled as soon as the next hash is solved and recorded to either one of the competing chains making one longer than the other. And that settles it. The winning (longer) chain is retained as the official version of the blockchain and the losing chain is ‘orphaned’.”
nChain Chief Technology Officer Steve Shadders said that reorgs and orphans were actually how Bitcoin was intended, with Bitcoin SV the only cryptocurrency that adheres to the Satoshi Nakamoto white paper protocol.
“We’ve all been told for ten years that orphans are bad and a security risk. But it’s simply not the case; it’s actually how Bitcoin is supposed to work,” he explained.
Dr. Craig Wright has also pointed out orphan blocks are not a “flaw”—they are, in fact, a necessary part of the system that makes Bitcoin strong.
“Many developers think that Orphan blocks are a primary concern that needs to be address and worse, fixed,” Wright wrote in his “Iron and Steel” Medium post. “Orphans are not a flaw; they are the carbon introduced into the Iron that makes Bitcoin steel.”