Mining Theory: A theoretical mining based attack

Question

Okay, so, here is my scenario:

Imagine a group of miners who are mining a coin are responsible for a large portion of the hash rate on the network (let's say not quite 50%). Looking at the parameters of a coin, one can easily deduce when difficulty re-targeting will occur.

So let's say the group of miners stop mining the coin for the duration of a difficulty re-targeting window, causing a sharp decline in the hash rate, and thus very likely the rate at which blocks are being found, ultimately causing the difficulty to drop. They then all band together and start mining the coin again, with the significantly reduced difficulty and are able to mine blocks much faster for the duration of the difficulty re-targeting window.

Is there any known cases of this occurring, and what preventative measures could be taken to avoid this? I realize this is akin to a 51% attack, with a few key differences. Any thoughts/comments would be appreciated!

• Schwifty

Answer 1

Is there any known cases of this occurring

Yes, see Bitcoin Cash. While Bitcoin Cash had their "Emergency Difficulty Adjustment" algorithm in place, many miners would game that to cause the difficulty to significantly decrease and then quickly mine many blocks again to generate Bitcoin Cash much faster.

what preventative measures could be taken to avoid this?

You could use an algorithm which does more than just the simple difficulty adjustment algorithm that Bitcoin uses. If you do something that adjusts more frequently or has overlapping windows, you can avoid this issue as the difficulty would ramp up and down more quickly to compensate for the sudden influx of miners. However, such an algorithm could cause the difficulty to oscillate and generally behave strangely, so you will want to do simulations and study the algorithm before deploying it to an actual coin.