ADA New Year Giveaway has concluded

Thanks to all of the participants for helping to make the contest a success, and congratulations to all the winners! Winners, please see the email you received for prize details.

The fight for the grand prize was fierce, with Razor-Cloud-Face and Mint-Flint-Spear battling it out to the last hours of the competition. In the end, Razor-Cloud-Face was able to maintain the lead and cross the finish line first by a small margin.

The second place winner was a dark horse, coming from nowhere near the end of the competition to dominate on profit by a healthy margin. Hats off to Solstice-Destiny-Salmon for taking us by surprise.

Finally, the five lucky $5,000 winners were selected randomly from all contestants, and their trading volumes ranged as low as .01 XBT. Any trader, big or small, can win the lucky draw, so make sure your name is in the hat for the next one.

If you didn’t get one of the lucky prizes, don’t worry — you have an even better chance with 15 randomly awarded prizes on our new Stellar Giveaway. This time, one lucky winner will receive $25,000! Learn more.

Wishing you a prosperous 2018.

The BitMEX team




Mining incentives, part 3: Short term vs. long term

Abstract: In this third piece on crypto mining incentives, we look at the different time periods miners may choose to maximise profits: in the short term or long term. We draw analogies with related concepts in traditional mining, such as high-grading. In corporate finance circles, there are rumours of potential IPOs for crypto miners, which could mean management focus shifts to the short term, as these groups may unfortunately need to justify quarterly earnings to investment analysts. We then look at the implications of this on potential network issues, such as replace by fee (RBF), AsicBoost, and the blocksize limit.  Whether one likes it or not, we think full RBF is coming.

Bitmain crypto-mining farm in Inner Mongolia: photograph (above) and satellite image (below). Bitcoin mining is no longer for only for  hobbyists. (Source: Google Maps satellite image)


In September 2017, we wrote two pieces on mining incentives. Part 1 focused on the mining cost curve and compared it to the dynamics of the cost curve in traditional mining while part 2 looked at circumstances in the energy industry that could result in attractive opportunities for crypto miners, concluding that failed or otherwise uneconomic energy projects may be best suited for Bitcoin mining.  In November 2017, we wrote about miners chasing short-term profits in the Litecoin vs. Dogecoin hashrate wars of 2014 and how this was repeated again with Bitcoin Cash, as the hashrate oscillated between coins due to miners attempting to maximise short-term profits rather than make decisions based on ideological support for their favoured coins.

This piece looks at the possibility that miners will focus on short-term profit maximisation (perhaps even next-block profit maximisation) or on promoting the long-term viability of the system by enacting policies designed to improve the end-user experience, thereby potentially increasing long-term profits. The level of competition in the industry, as well as the level of profitability, can alter decisions to pursue short-term and long-term profit maximisation. Higher levels of competition and lower profit margins may result in a more short-term outlook. Each strategy could have implications for Bitcoin, replace-by-fee transactions, AsicBoost, or the blocksize-limit policy.

Mining is becoming less ideological and more commercial. At the same time, the intensity of competition may increase in the coming months and years. We predict full RBF will become prevalent in Bitcoin mining, as miners seek to maximise short-term profits.

Long term vs. short run

Most businesses want to maximise profits and Bitcoin mining is likely to be no exception.  In the past, perhaps, some miners were hobbyists or idealists, but this era appears to have ended — profits are now seen as a main driver as the industry grows and becomes more commercial. However, profit maximisation can be more complex than one may think. Strictly speaking, investors should select projects which maximise discounted returns, and evaluating the difference between profits today and profits tomorrow — the discount rate — is often a challenge.

Analogy with traditional mining: High-grading

In traditional mining, high-grading is the practice of harvesting a higher grade of ore in a way that wastes or destroys lower grade ore, reducing the overall return of the mine. This destructive process reduces the total value of the ore body by making some ore inaccessible or literally destroying it in favour of access to higher grade ore. Mining management teams may engage in this process due to short-term pressure — for example, to boost short-term profit margins to satisfy shareholders, to generate cash flow to satisfy debt holders, or to achieve their own performance-linked bonuses. Management teams might conceal this  conduct from the public or from investors.

High-grading often occurs during prolonged periods of price weakness of the relevant commodity, when profit margins are low, debt levels are high, and there is considerable pressure on management teams. Randgold CEO Mark Bristow has said:

The question is, are the companies going to re-cut their business long-term at a lower gold price, or are they going to re-cut their short-term business hoping they’ll be rescued in the long term by the gold price? That second one is called high-grading and it’s a disaster.

The diagram below depicts the plan for a high-grading open-pit mine. An initial plan for a larger mine (scenario A) captures more of the total ore but the alternative plan (scenario B) increases the grade of the ore mined, while permanently destroying or removing access to some high-grade ore, which is potentially detrimental to the long-term interest of mine owners.

(Source: Exploration Alliance)

Revising a mining plan due to changes in discount rates, costs, or commodity prices can of course be entirely legitimate in some circumstances, but high-grading has negative connotations and is normally associated with reducing the value of assets in an inappropriate manner.

Although there is no direct link between high-grading and crypto mining, the concept demonstrates that when mining teams are under pressure, they can make short-term decisions that destroy long-term shareholder value. This is particularly relevant in the listed space, where shareholders may have less control, less information, or more of a short-term focus.

Mining profitability

Whether miners make these destructive short-term-focused decisions or not often depends on the level of profitability, which can be determined by the price of the underlying commodity. If the price of the commodity or crypto asset falls, a miner who is no longer profitable may be faced with three options:

  • Operate at a loss — This could make a contribution to fixed costs.
  • Suspend operations — In traditional mining, this could reduce the supply of the commodity and thus increase its price. In crypto mining, on the other hand, this could lower the difficulty, increasing profit margins for the remaining miners.
  • Modify mining policies — In traditional mining, this could be a modification to the mining plan such as, for example, a switch to high-grading. In the case of crypto, it could be engaging in full RBF, overt AsicBoost, or, in the event of an unlimited blocksize limit, clearing the memory pool to scoop up all the fees, despite the negative impact this could have on pricing in the transaction fee market, destroying industry prospects.

In general, lower profitability can increase the pressure on management teams and lead them to make more short-term decisions — for example, to pay down debt if they are under pressure from banks or to return to profitability if they are under pressure from shareholders. Higher-margin companies may have more freedom to focus on the long term and may be able to invest for the future.

Industry concentration

In addition to profitability, another factor to consider in crypto mining is the level of concentration in the industry.

Mining pool concentration over the last six months. (Source: BitMEX Research,

The above chart illustrates the level of concentration among mining pools, but one could also analyse the level of concentration in the industry by looking at chip production or the control of mining farms. With respect to chip production, we estimate that Bitmain may have a 75% market share in Bitcoin.

The policies of a miner with a large market share may have a significant impact on Bitcoin, which could impact the value of the entire system. In contrast, the policies of each small miner with a low market share may not have much impact on the system as a whole. Among the small miners, this threatens to become a tragedy of the commons if policies that are best for the system as a whole are not those that are most beneficial for each small individual miner. For instance, a small miner with a 1% market share can opt to engage in action that increases profits but damage the prospects of the whole system if all miners were to engage in the same action. Why would the small miner choose not to conduct the activity, since that miner’s 1% market share will not make much difference on its own.

In addition, the level of competitive intensity may also matter. If miners are ruthlessly competing for market share, they may be more focused on doing whatever it takes to improve profit margins to win business.

Replace by fee

Replace by fee (RBF) is a system that enables the replacement of a transaction in a miner’s memory pool with a different transaction that spends some or all of the same inputs, due to higher transaction fees. A variant of this feature was first added by Satoshi, who later removed it. Bitcoin Core then added in an opt-in version of the technology, where users must specify that the transaction can be replaced when making the transaction.

RBF has always been controversial, both the full version and the opt-in version, with detractors claiming that it reduces the usability of Bitcoin by undermining zero-confirmation transactions. Supporters of RBF claim, among other things, that miners will eventually adopt full RBF anyway, as it boosts short-term profits by selecting transactions with larger fees, even though it may harm long-term profitability by reducing the utility of the system, which could lower the Bitcoin price. Again, it’s sometimes seen as a “tragedy of the commons” problem. Opponents of RBF may counter this by saying miners have more of a long-term focus, and therefore RBF advocates are solving a theoretical game-theory problem that may not apply.

Certain industry characteristics encourage short-term profit-driven motives and therefore full RBF:

Short-term profit: Full RBF more likely Long-term profit:  Full RBF less likely
A period of falling Bitcoin prices A period of rising Bitcoin prices
Lower profit margins Higher profit margins
Lower levels of industry concentration Higher levels of industry concentration
More intense competition and rivalry among miners A less intense competitive environment and collaboration among miners
Publicly owned mining companies Privately owned mining companies
Profit-driven miners Ideologically driven miners

Unlimited blocksize limit

As anyone following Bitcoin knows, the blocksize debate is a complex issue. One angle is the interrelationship between the fee market and mining incentivisation. Supporters of larger blocks sometimes argue that a fee market would still work with an unlimited blocksize, while “smaller-blockers” often dispute this point.

An element of this argument is related to whether miners focus on the long term or the short term, just like for RBF. Supporters of an economically relevant blocksize limit claim that without a limit, miners may focus on maximising short-term profits and scoop up all the fees, resulting in low fees and insufficient mining incentives. “Larger-blockers” retort that miners will have more of a long-term focus and would not take such action, as it would damage the long-term viability of the system, and therefore their businesses.

History of the “death spiral” argument

In some ways, this short-term versus long-term incentive discussion, or the “death spiral” argument, goes right to the genesis of the blocksize debate, back in in April 2011, which is when Mike Hearn wrote this at Bitcointalk:

The death spiral argument assumes that I would include all transactions no matter how low their fee/priority, because it costs me nothing to do so and why would I not take the free money? Yet real life is full of companies that could do this but don’t, because they understand it would undermine their own business.

One day earlier, Hearn had written that “the death spiral failure mode seems plausible” but he apparently changed his mind after thinking about the issue further.

Some larger-blockers have somewhat shifted views in recent years to a pro-mining philosophy of chasing short-term profits, perhaps because a large miner, Bitmain, ironically has been one of the most prominent advocates of larger blocks. Most larger-blockers appear have shifted the narrative to other valid points, although, as explained above, this “short term versus long term” line of thought can be considered the genesis of the blocksize debate and part of the reason for the initial division in the community.

There is no right or wrong answer to these questions. Whether miners have a short-term focus or long-term focus depends on many factors, including profitability and market share. The industry may go through cycles of shifts between long-term and short-term focus depending on conditions in the industry. This phenomenon is visible in traditional mining, driven by commodity price cycles that impact industry conditions.

Changing times: Short-term profit focus will be king

The Bitcoin community is rapidly transforming from a cohesive group of people with a shared vision working together to build a revolutionary technology to a larger community of competing profit-driven factions, and the change is almost complete. It may have seemed unrealistic a few years ago to assume that miners would be primarily driven by short-term profit maximisation, but this has increasingly become accepted as the norm, certainly after the hashrate swings caused by Bitcoin Cash’s EDA.

Mining is a business: TSMC has reported that one crypto-mining business may be spending US$1.5 billion per annum on chips, and growing. In some corporate-finance circles, rumours are circulating that large mining pools or chip producers could shortly conduct an IPO, something almost unimaginable a few years ago. This could put management of the mining pool in the unfortunate position of needing to justify operating profit margins to investment analysts and shareholders each quarter.  At the same time, many expect the mining industry to become more competitive this year, with new companies launching competitive products.

In this new world, RBF behaviour and the fee market “death spiral” failure mode seem more and more inevitable. Perhaps early fee market and RBF advocates were too obsessed with unrealistic and complex game theory, and maybe were too early, when a better tactical decision could have been to focus on the user experience before adopting RBF and full blocks. Bitcoin has changed, and short-term profit maximisation is the new mantra.

We predict that many miners will engage in full RBF and even overt AsicBoost (which can also boost profits) in the coming years as they do all they can to maximise short-term profits. Whether one likes it or not, it’s coming….

BitMEX $100K Giveaway leaderboard 14 January 2018

Check your user name here:

Or follow these steps:

  1. Go to the BitMEX platform at
  2. Click on Contracts in the top menu bar.
  3. Click on Leaderboard in the left navigation bar.

Remember, five random ADA contract traders will be awarded $5,000 each.

Good luck to all participants!

The BitMEX Team

BitMEX $100K Giveaway leaderboard 13 January 2018

Check your user name here:

Or follow these steps:

  1. Go to the BitMEX platform at
  2. Click on Contracts in the top menu bar.
  3. Click on Leaderboard in the left navigation bar.

Remember, five random ADA contract traders will be awarded $5,000 each.

Good luck to all participants!

The BitMEX Team

Trade the new Stellar contracts at BitMEX and you could win up to $25k

BitMEX is thrilled to announce a new $100k lottery giveaway for Stellar (XLMF18) contracts! To win one of the 15 lottery prizes, simply trade the new Stellar contract on BitMEX to collect tickets. Even with just one ticket, you have the chance to win the grand prize of $25,000.

Start: Wednesday, 17 January 2018 00:00 UTC
End: Friday, 26 January 2018 12:00 UTC


1 Grand Prize of 25,000 USD
1 Second Prize of 10,000 USD
13 Third Prizes of 5,000 USD


  • Any trader who trades 5,000 Stellar contracts earns a lottery ticket. Each trader can earn up to 10 lottery tickets.
  • Bonus tickets: any trader who trades a total volume of one million or more Stellar contracts receives an extra 10 lottery tickets, for a total of 20 lottery tickets.
  • Each lottery ticket has an equal chance of winning one of the 15 prizes.
  • A trader cannot win more than one prize.

It’s simple to participate:

The BitMEX Team

Terms & Conditions:

  1.     BitMEX reserves the right to cancel or amend the giveaway or giveaway rules at our sole discretion.
  2.     Users who engage in market manipulation will be excluded from the contest. This determination will be made at the sole discretion of BitMEX.
  3.     Winner will be notified via email on 31 January 2018.
  4.     All awards are paid out in Bitcoin at the prevailing price of the .BXBT index at 26 January 2018 12:00PM UTC.

BitMEX $100K Giveaway leaderboard 12 January 2018

Check your user name here:

Or follow these steps:

  1. Go to the BitMEX platform at
  2. Click on Contracts in the top menu bar.
  3. Click on Leaderboard in the left navigation bar.

Remember, five random ADA contract traders will be awarded $5,000 each.

Good luck to all participants!

The BitMEX Team

BitMEX $100K Giveaway leaderboard 11 January 2018

Check your user name here:

Or follow these steps:

  1. Go to the BitMEX platform at
  2. Click on Contracts in the top menu bar.
  3. Click on Leaderboard in the left navigation bar.

Remember, five random ADA contract traders will be awarded $5,000 each.

Good luck to all participants!

The BitMEX Team

BitMEX $100K Giveaway leaderboard 10 January 2018

Check your user name here:

Or follow these steps:

  1. Go to the BitMEX platform at
  2. Click on Contracts in the top menu bar.
  3. Click on Leaderboard in the left navigation bar.

Remember, five random ADA contract traders will be awarded $5,000 each.

Good luck to all participants!

The BitMEX Team

BitMEX wishes you a happy new year with $100K Giveaway!

Happy new year! To celebrate, BitMEX is giving away $100,000 in prizes. Simply trade the new Cardano (ADAF18) contract on BitMEX and you could win a grand prize of up to $50,000. Even with just one trade, you could win one of five randomly selected $5,000 prizes!

Start: Monday, 8 January 2018 08:00 UTC
End: Monday, 15 January 2018 23:59 UTC

Prize Details
Volume Winner $50k The trader who trades the largest amount of Cardano (ADAF18) contracts will receive $50,000 US.
Profit Winner $25k The trader who has the largest profit (in XBT) from trading the Cardano (ADAF18) contract will receive $25,000 US.
Lucky $5k (five winners) $5k Any trader who trades at least one Cardano (ADAF18) contract enters a random draw to win one of five $5,000 US prizes.

It’s simple to participate:


The BitMEX Team

Terms & Conditions:

  1.     BitMEX reserves the right to cancel or amend the giveaway or giveaway rules at our sole discretion.
  2.     Users who engage in market manipulation will be excluded from the contest. This determination will be made at the sole discretion of BitMEX.
  3.     Profit is defined as realized profit (in XBT terms) of all trades where the trade was opened and closed during the contest period window.
  4.     No user can win more than one prize. 
  5.     Winner will be notified via email on 17 January 2018.
  6.     All awards are paid out in Bitcoin at the prevailing price of the .BXBT index at 15 January 2018 23:59 UTC.

Bitcoin Cash sale summary

BitMEX completed the sale of all Bitcoin Cash (BCH) held on behalf of our users. The Bitcoin Cash sale details are:

  • The amount of Bitcoin Cash a user is entitled to is determined by their margin balance at 1 August 2017 13:17 UTC, a few seconds after block 478,588.
  • Bitcoin Cash to Bitcoin (XBT) ratio is 1 BCH to 0.1707 XBT.
  • Users’ BitMEX Bitcoin wallets will be credited with the amount of Bitcoin they are entitled to.

The Insurance Fund was credited with 120.5321631 XBT due to its holdings of Bitcoin Cash.

A complete history of Bitcoin’s consensus forks

Abstract: In this piece, we list 19 Bitcoin consensus rule changes (or 18 as an accidental one “failed”), which represents what we believe to be almost every significant such event in Bitcoin’s history. At least three of these incidents resulted in an identifiable chainsplit, lasting approximately 51, 24, and six blocks, in 2010, 2013 and 2015, respectively.

(Source: gryb25)


Term Definition
 Chainsplit A split in the blockchain, resulting in two separate chains, with a common ancestor. This can be caused by either a hardfork, a softfork, or neither.
 Consensus rule changes

A loosening of the consensus rules on block validity, such that some blocks previously considered as invalid are now considered valid.

Existing nodes are required to upgrade to follow the new hardforked chain.


A tightening of the consensus rules on block validity, such that some blocks previously considered as valid are now considered invalid.

Existing nodes do not necessarily need to upgrade to follow the new softforked chain.

Note: These terms are believed to have originated in April 2012 and formalized in BIP99 and BIP123.

List of Bitcoin consensus forks

Date Activation Block Number BIP Number or Software Version Description Type Outcome
28 July 2010 n/a1 0.3.5 OP_RETURN disabled, fixing a critical bug which enabled anyone to spend any Bitcoin. Softfork No evidence of any issues during this upgrade.
31 July 2010 n/a1 0.3.6 OP_VER and OP_VERIF disabled.3 Softfork Some users had trouble upgrading and it was recommended that nodes should be shut down if they could not be upgraded.2
The addition of the OP_NOP functions, although perhaps there was no usage of OP_NOP prior to this point. Hardfork
1 Aug 2010  n/a1 0.3.7 Separation of the evaluation of the scriptSig and scriptPubKey.  Fixing a critical bug which enabled anyone to spend any Bitcoin Potentially a non-deterministic hardfork No evidence of any issues during this upgrade
15 Aug 2010 74,638 0.3.10 Output-value-overflow bug fix following a 184.5-billion Bitcoin spend incident. The 0.5 BTC that was the input to the transaction remains unspent to this day. Softfork A chainsplit occurred.  Around five hours after the incident, a fix was released, client 0.3.10. It is believed that 51 blocks were generated on the “bad chain” before the “good” chain retook the PoW lead.
Disabling OP_CAT, which removed a DoS vector, along with the disabling of 14 other functions. Softfork
7 Sept 2010 n/a1 0.3.12 Adding the 20,000-signature operation limit in an incorrect way. This incorrect limit still exists. Softfork No evidence of any issues during this upgrade.
12 Sept 2010 79,400 n/a

Adding the 1-MB blocksize limit.

The “MAX_BLOCK_SIZE = 1000000” commit occurred on 15 July 2010, which was released in the 0.3.1 rc1 version of the software on 19 July 2010. The commit enforcing the 1-MB rule occurred on 7 September 2010, activating at block 79,400. On 20 September 2010, Satoshi removed this activation logic, but kept the 1-MB limit.

Softfork No evidence of any issues during this upgrade.
15 March 2012 171,193 BIP30 Disallow transactions with the same TXID, unless the older one was fully spent. In September 2012, the rule was applied to all blocks, apart from 91,842 and 91,880, which violate the rule. Softfork This was a flag-day softfork. There is no evidence of any issues.
1 April 2012 173,805 BIP16 Pay-to-script hash (P2SH) allows transactions to be sent to a script hash (address starting with 3) instead of a public-key hash (addresses starting with 1). Softfork 55% activation threshold, over blocks in the seven days prior to 1 February 2012. Miners did not upgrade fast enough, so the evaluation point was delayed until 15 March.  Users running 0.6.0 rc1 who did not upgrade for the delay activated the softfork early and got stuck on block 170,060 when an invalid transaction, according to their nodes, was mined.  After activation,  the remaining 45% of miners who produced invalid blocks for several months after the softfork caused problems.
24 Mar 2013  227,835 BIP34 Requires the coinbase transaction to include the block height. Softfork 95% activation threshold. A successful rollout occurred.
11 Mar 2013 225,430 0.8.0 This was an unplanned hardfork caused by the migration from Berkeley DB to LevelDB, which accidentally removed an unknown 10,000-BDB database lock limit. This caused a chainsplit on 11 March 2013, although the software which caused the error was released 20 days earlier on 20 February 2013. The change was reverted as the Bitcoin economy and miners switched back to 0.7.2 rules. No change in the consensus rules A chainsplit of at least 24 blocks occurred, with the 0.8.0 chain having a maximum lead of 13 blocks. A successful double spend also occurred. The original rules chain eventually re-took the PoW lead.
18 Mar 2013 n/a1 0.8.1 This was a temporary softfork, introducing a new rule requiring that no more than 4,500 TXIDs are referenced by inputs in a block. This rule is stricter  than the 10,000-BDB lock limit. The rule expired on 15 May 2013, a flag-day hardfork. Softfork There is no evidence of any issues.
15 May 2013 or 16 Aug 2013  252,451 or earlier BIP50 In August 2013, a block may have been produced that violated the original 10,000-BDB lock limit rule, which was relaxed on 15 May 2013. Hardfork There is no evidence of any issues.
4 July 2015  363,731 BIP66 Strict DER signature upgrade means Bitcoin is no longer dependent on OpenSSL’s signature parsing. Softfork 95% threshold over a 1,000-block period. A chainsplit occurred, lasting six blocks, as some miners signaled support for BIP66 but had not upgraded and were SPY mining. The new softfork rules chain eventually took the lead.
14 Dec 2015  388,380 BIP65 Check Lock Time Verify enables funds to be locked until a specific time in the future. This is Bitcoin’s first new function. Softfork Successful rollout using a 95% threshold.
4 July 2016  419,328 BIP68

Relative lock-time enables a transaction output to be banned for a relative amount of time after the transaction.


Median time-past removes the incentive for a miner to use a future block timestamp to grab more transaction fees.

Softfork Successful rollout using 95% versionbits signaling.
23 July 2017   477,800 BIP91 This temporary softfork makes signaling for the SegWit upgrade mandatory. Softfork Softfork successfully activated with an 80% miner threshold over a 336-block period, although only a tiny minority of users enforced BIP91 rules, which have since expired.  Therefore, the risk of a chainsplit was elevated in this period.
01 Aug 2017  478,479 BIP148 This temporary softfork makes signaling for the SegWit upgrade mandatory for a two week period following 1 August 2017. Softfork Flag-day softfork appeared to succeed with no issues, although only a minority of users enforced BIP148 rules, which have since expired. Therefore, the risk of a chainsplit was elevated in this period.
24 Aug 2017  481,824 BIP141
The segregated-witness (SegWit) upgrade. Softfork Rollout using 95% versionbits signaling.
The year 2262  13,440,000 BIP42 Fixed a 21-million coin-supply cap bug.  The software was upgraded in April 2014 to fix this bug, but the new rule does not apply until the 23rd century. Softfork The softfork is not applicable yet.

(Sources: BitMEX Research, GitHub, Bitcoin blockchain)


  1. With the exception of the 1-MB blocksize limit, prior to the 2012 BIP16 softfork, there was no activation methodology, so if the fork occurred smoothly without a chainsplit, there is not necessarily a specific block height or date on which the consensus fork occurred.
  2. “If you can’t upgrade to 0.3.6 right away, it’s best to shut down your Bitcoin node until you do.” — Satoshi Nakamoto
  3. Prior to the removal of OP_VER, each software upgrade could potentially be considered a non-deterministic hardfork and these have been excluded from this list. If the definition of hardforks does include this, then it’s a somewhat pedantic definition.
  4. There are no consistent definitions used in the above table because, for example, a different definition of the date on which the fork occurred may be more relevant in each incident, depending on the circumstances.
  5. Others have mentioned that changes to the P2P protocol can also be considered hardforks if they make previous software releases unusable, since they can no longer connect to the network. Strictly speaking, however, these do not relax the rules on block validity and one could sync old nodes by setting up a relay of intermediary versions of the software. These changes are excluded from the above list.
  6. Some consider BIP90 a hardfork, but since it only relaxed rules related to softfork activations that happened in the past, it does not share many of the characteristics or risks normally associated with consensus forks. Using the same logic, the block checkpoint scheme can also be considered a softfork.
  7. In July 2010, the chain selection rule was altered to shift to most accumulated work from the number of blocks. Technically, this is not a change to block validity rules; however, this change does share some of the risks associated with consensus rule changes.

Was the 2013 incident a hardfork?

On balance, the increase in the BDB lock limit a few months after the 11 March 2013 chainsplit was a hardfork. The rule in question was a 10,000-BDB lock limit, which was increased. The rule was relaxed on 15 May 2013 in software version 0.8.1, which was released on 18 March 2013. A block exceeding this limit may finally have been produced on 16 August 2013 so one can define the date of the hardfork to be either 15 May 2013 or 16 August 2013.

Some have argued that this may not have been a hardfork for a variety of reasons, including that this rule was “quasi-non-deterministic” or that one could manually change the BDB config settings. Indeed, due to the non-deterministic nature of the lock limit, perhaps it is theoretically possible one could have a local system set up such that the old BDB lock limit has never been breached. Therefore, one could declare that there has “never been a hardfork” in Bitcoin, following a strict definition that requires a hardfork to be deterministic or perhaps even directly related to Bitcoin data such as transactions or the block header.

When discussing this incident, Bitcoin developer Gregory Maxwell said:

Sort of a mixed bag there, you can actually take a pre BIP-50 node and fully sync the blockchain, I last did this with 0.3.24 a few months ago. It just will not reliably handle reorgs involving large blocks unless you change the BDB config too. So it’s debatable if this is a hard fork either, since it’s quasi-non-deterministic. There were prior bugs fixed where older versions would get stuck and stop syncing the chain before that too… So I think by a really strong definition of creating a blockchain which violates the rules mandated by prior versions we have never had a hardfork.

Chainsplit incident of July 2015

In the list of consensus rules changes above, there are three incidents that caused identifiable chainsplits. The most recent of these occurred on 4 July 2015, during the BIP66 softfork upgrade.

Immediately after the activation of BIP66, there was a six-block orphan chain created because a miner produced an invalid block that was not recognised as invalid by some other mining pools, because they were not validating new blocks.

In this case, some miners signalled support for the BIP66 softfork but hadn’t actually upgraded their nodes to validate; one could say miners were “false flagging”. If the miners had been validating blocks, they would have discovered the block was invalid and rejected it. Instead, some miners built on top of the invalid block and a chainsplit occurred.

A diagram illustrating these six blocks and the chainfork is displayed below.

Graphical illustration of the July 2015 chainsplit. (Source: and

Note: After the publication of this piece, an alternative list of consensus versions was published on the Bitcoin Wiki.


Whilst many claims made in this piece are cited, we do not guarantee accuracy.  We may have made errors or accidentally omitted consensus rule changes from the list.  We welcome corrections.