In an unfortunate series of events, digital telecommunications strategy firm United American Corporation (UnitedCorp) filed a lawsuit against Bitcoin.com, Bitmain, Kraken, and Roger Ver, among others, in Florida on Dec 6, 2018.
The lawsuit alleges collusion among the accused parties in an arrangement to control and dominate the Bitcoin Cash (BTC) network. The suit further alleges that, as a result of the defendant’s actions, a global capitalization collapse took place within the Bitcoin Cash network.
According to the UnitedCorp suit, the goal of the defendants was to centralize the Bitcoin Cash network. This was intended to occur after the Nov 15, 2018, scheduled Bitcoin Cash software update. Toward this goal, UnitedCorp and other Bitcoin Cash stakeholders were subject to unfair business competition practices — including disparate opportunities, deception, and manipulation.
Through the lawsuit, UnitedCorp is seeking injunctions against the defendants in order to prevent further actions within the Bitcoin Cash network from taking place. UnitedCorp is additionally seeking compensation to account for the damages it has experienced.
As one of the more progressive yet volatile blockchain networks in existence, the Bitcoin Cash network has already had a tough year. The Nov 15 hard fork resulted in two competing sectors for BTC. Bitcoin ABC became the dominant chain over its competitor, Bitcoin SV.
This is significant for the lawsuit, as it alleges that Bitcoin ABC rose to dominance as a result of “rented hashing.” Rented hashing is a shady practice in which tremendous amounts of computational power are artificially, or temporarily, redirected to a network that wouldn’t otherwise possess such advantages. It is done in order to establish network control in situations like these.
Once Bitcoin Cash established itself as the dominant network over Bitcoin SV, the rented hashtag was no longer accessible by the Bitcoin Cash for computational power.
According to the suit, the rented hash power, that was utilized and then immediately withdrawn following the upgrade, existed to create the illusion of a longer chain over the actual rule sets. In other words, the blockchain was manipulated by the individuals and companies named in the lawsuit.
A poison pill
Additionally, the UnitedCorp suit alleges that a “poison pill” was put into the blockchain by the same defendants on Nov 20, 2018. This poison pill, known as a “Deep Reorg Prevention,” will allegedly allow continued control of the network during future upgrades, implementations, and ruleset changes.
UnitedCorp states their goal in filing this lawsuit against the exchanges and individuals named will support the pursuit of integrity within distributed ledger technology (DLT) and decentralized blockchains. It believes in the value of DLT, and see it as the future of telecommunications.
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