Hypothetical scenarios to help make the right decision with the fork

[zerodrama]

First, a definition of purpose:
The purpose of a fork is to maintain the current record of transactions under a modified protocol. This is called a hard fork.
The community is the same people regardless of currency. We could have just called it quits and released a new client and started over at a sufficiently high difficulty. This I would call a cold fork. It would be the same community, the same spirit so the reasons for a hard fpork over a cold fork need to be spelled out.

A cold fork starts you over. Easy as pie. But you lose the branding, the reputation becomes frozen in time, and the trolls go wild with “I TOLD YOU IT WERE A SCAMS!”.

Now a review of two extremes:
We are now experiencing constipated coin.

Constipated coin is caused by a large number of coins being generated in the early period of a coin. It doesn’t matter whether it is a premine, that is to say a coin produced before a large portion of the public even knows about it. A perfectly honest coin with low difficulty published a week before release with CNN at your door will STILL cause a crash. The fundamental variables are price and cost. Early adopters who tank a currency can do so because the initial cost of acquiring via mining was low.
Honest mistakes can be just as disasterous as fraud. Price will go down until it meets an average of initial and current cost. If current cost is high, you will not see the coin rise back up. Cost is measured in both perceived profit and perceived risk.

The other extreme is bubble coin.

If constipated coin is the Texas Chainsaw Massacre, bubble coin is Death by A Thousand Cuts. Bubblecoin is caused by repeated dumps where the difficulty is updated too slowly. If the hashrate jumps 200% (3x) and difficulty only goes up 50% (1.5x), then twice as many coins will be minted as before the jump. Then you have a trainload of constipated coin attacks coming. The coins will be sold half for bitcoin for future value and half for more hardware. And the process will repeat over and over.

Constipated coin kills currencies. Bubble coin creates vampires.

You have to have a nonlinear curve of difficulty increase. The first jump could be 40%, but afterwards it has to catch up or you will get the same result as constipated coin. In other words, the difficulty inertial dampers would have to be used in emergencies only. Now it’s fine to have emergency mode if it’s decided by the network rather than a central group (SolidCoin made this mistake).

I very strongly suggest that the modification SHOULD NOT BE engaged in general use.

[archminer]

It does catch up. The effects after 2016 blocks are almost the same as before.

[zerodrama]

If the hashrate goes 3x and the difficulty only goes 1.4x, the amount of coins available for sale PER day double UNTIL the next jump, which is only 1.4x squared or 1.96x. Assuming hashrate doesn’t go up, it takes 4 jumps to catch up. This is assuming hashrate only went up once.
2016 blocks is 3.5 days, 84 hours. 504 blocks is 21 hours.

If hashrate is rocketing up and price is falling because it’s being sold, the people who weren’t in the hash jump will sell even more, yielding profits for the ramp miners.

Miners then drop the mining so the transfer rate falls and then the price falls further. Difficulty adjusts at 504. Now the constipation is stopped, but here we have miners who made bank and buy up all the cheap coins. Then they rent more hardware. Result is that as long as difficulty rises slower than hashrate, you open the door for constant attacks.

If the emergency mode is too complicated there is another idea I would suggest which makes it forgiving for short variations and hostile to sustained jumps.

It also effectively blocks currency avalanches. There is a huge exodus versus new adopter issue. You can argue that early adopters were just lucky, but when early adopters prevent new adopters in currencies with possibly different goals or philosophies that’s either outright currency war or a stampede.

Instead of a stampede, stampeders are forced to sell rather than kill the new alts.