0.3 Difficulty retarget - Makh1/italcoin GitHub Wiki

The retarget block is 2016 in both Bitcoin and ITAL coin, but because ITAL coin blocks are found 2.5 times faster, the difficulty will retarget about every days

Pros

• When the computation power of the network reduces dramatically in the event that many miners suddenly quit, block generation would crawl until the next difficulty adjustment. Having a faster retarget mitigates this concern.

Cons

• Shorter retarget window may lead to less stable difficulty adjustments. For example, if a proportionally high amount of CPU power connects to the ITAL coin network only during Sundays, not having any of that CPU power inside a 1 day retarget window will cause the difficulty to vary. Unstable difficulty is bad if it doesn't reflect the hash power of the network accurately: when the difficulty is too low relative to the CPU power that is currently in the network, the faster blocks imply more overhead, less security, and more monetary inflation, and when the difficulty it too high relative to CPU power, the slower blocks mean slower transaction time.

• Unstable difficulty might encourage chain hopping.

• Less security from attacks that rely on lowering the difficulty. Example: an attacker makes a one time investment in hash power, uses this hash power to start extending a recent block with his own fork of consecutive blocks while lowering the difficulty (easier to do with the shorter retarget window), isolates a node of e.g. some online bank from the rest of the network, waits until his fork is longer than what this node has already seen in the real blockchain, broadcasts his forked chain to this node, and with the lower difficulty he now needs less hash power to continue to communicate with the isolated node until it agrees to transact in the forked chain.