What happens when network is split for prolonged time and reconnected?

Suppose that BitCoins are being widely used all across the globe.  Suppose that all internet connections between two countries are blocked (eg China and US go to war) and people still engage in transactions inside each network.  Now all transactions within each network are broadcasted to all nodes inside its network, but not to the other network.  Within each network, the longest chain in each would be considered valid, and the BitCoin economy would continue to exist inside each network.

Now after several years existing independently, what happens when the two networks are reconnected?

Maybe they won't be reconnected. Instead, we will effectively have two currencies. This will lead to the creation of an Eastern-Western bitcoin currency exchange market(s).

It does not require an entity to know what happen if the design of the bitcoin network didn't anticipated this kind of event. If it does happen anyway, than it may or may not be intended to deal with it.

It would seem to me it still warrant a bitcoin exchange market.

It is possible to run an experiment just to see what happens. It would take 4 separate clients though running at the same time (probably help to have 4 different PC to do this)

Basically, take a fresh install of 2 PC, have them only connect to each other and let them generate blocks starting at 1, build up some coin, transfer between the two in a few transactions, then shut them down. Do the same thing on 2 different PC, build some coin for longer (more blocks), transfer some coin around, shut them down. Then fire up all 4 at the same time and have all 4 connected to each other and see what happens when one pair had a longer block chain than another.

My guess is the longer block chain will win and the lesser of the pair would lose all of their history/coins.

So if this was on a much larger scale (east vs. west), then whoever had the longest block chain would win once the networks started to merge back together.

Thinking about that thought experiment, one could run their own internal micro-payment system for fun 

Not easily because it would entail finding out what "blocks" everyone else has. Since everyone is working off the current chain, if you did find a client with "another" chain, it would either be silly short or hacker longer.

I, as a merchant, will only care about whether my network is a majority network,
so after a reconnect my transactions will be accepted.
So it will be enough for me to be able to monitor the current number of distinct nodes.
Put that into a graph and stop processing transactions if that number suddenly halves.
It may be a service on a web-server running a Bitcoin node.

But is there a way to monitor that number at all?
If not, it would be wise to add some feature to the standard, which will
allow to determine in real time what is the number of distinct nodes running.

But there may be others, who have their connections limit in effect, so they refuse to accept your connections and do not
connect to you by themselves. Still being connected to the network.

This is a task of counting distinct nodes in a graph. Too bad. 

Yes, ofcourse, I meant, you may be disallowed to connect to some nodes by the nodes themselves because they already have
too much connections, so the actual number of active nodes may be larger.
Or how should I understand the connection limit? Is it only an outgoing connection limit?

By the way, I myself run two nodes on public addresses and two other behind a firewall.
The last two are only allowed to connect to first two, and not not the Internet.
AFAIK, it counts as being connected to the network, so they generate blocks.

I think the idea of "super nodes" or hubs will help limit the possibility of a split. The more connected the network is the less the possibility of a split. I know not everyone can run a node that supports 7000+ connections but, if there were some highly connected super nodes running 1000 or so connections and these nodes could be inter-networked with each other this would allow for a stronger connection. Even if a node is at a connection limit and doesn't connect to the super node, it would be probable that one of the other nodes would be connected to a super node. The down side to running a super node is you spend more cpu time and bandwidth making connections and less cpu time generating. These losses may be small but, I don't know yet. I plan to compile a super node later on tonight and fire it up and the test network later on tonight. I will try and do some testing to see how the number of connections affects cpu and bandwidth usage.

Also I was thinking that if country A goes to war with country B both countries will still most likely maintain a connection to country C, D, E, and F which can maintain the network and prevent a split. If country A blocks all internet access and country B does not then Country A looses because, Country B still connects to C,D,E, and F; Therefor country A's block chain will be shorter. If Country A and B both block internet all together they both loose because C,D,E, and F have the longer block chain. IF A, B, C go to war with D,E,F and they block access to each other on the internet then we have two bit markets now.

I agree that if the world goes to hell in a hand basket a network split would be the least of our worries and it is probable that a split would not likely be due to war. I would think a network split is more likely to be caused by a country with an over zealous government repressing their own citizens via their national firewall. Another possibility would be a mass technical problem such as the rapid undersea cable cuts in 2008 (see Here or here) that cause some countries internet connection to slow to a crawl. The worst case scenario I can think of is that a large number of under sea cables or other link failures segment a large chunk of the worlds computer. The nodes outside the segment keep going like nothing happened and the same is true for the nodes in the segment. At some point we have the networks links fixed (would probably less then a week or so for another link to be established be it other land links come online or satellite links take over more bandwidth and a month at most for a more permanent fix.) I would guess that the network with the larger chunk of nodes would win out and the smaller segment would loose. The biggest problem would be that in this type of split there is not much time to try and work out a solution. Though it could be possible that in this situation if there were a super node or two in the segmented group it could still be able to make a connection to other super nodes and keep a split to a minimum.

This is interesting to me. What is most robust?

1000 nodes all with 9 connections

1000 nodes with 8 connections and one with 1000 connections

1000 nodes with 8 connections and ten with 100 connections

If you only connect with nodes 'near' your node then having only a few seems like a problem. If it's totally distributed then I think having the connections distributed would be better, but I really don't know.

Another thing to consider is how huge the profit opportunity will be if the network starts to get fractured. Everyone will want their transactions to get put in the next block for sure before an actual split and the fee will get bid up, this will give nodes incentive to make sure they can stay connected to those at risk and collect their fees. And thereby the network will not get split. I mean if a government ties down traffic they might actually run the nodes themselves for profit or some corrupt official who knows how to get away with it (n/m, no corruption in governments).

They can do all those things now......the only real thing stopping them is bad pr - hence banning you filming bureaucrats now that so many are being shown for what they are

Woot! Real facts! Nice!

Cool time machine thread too. Nice analysis!

So, I suggest not to concentrate heavily on preventing the network split, since that is inevitable event in the life of Internet,
but to invent some method to monitor connected computing power, to allow those, who bother, to stop processing transactions,
until the network's majority reconnects back.

Perhaps that would not be a realtime method, but a reasonable and fixed delay will still be accepted.
I'm sure, GUI client or daemon should inform you about total computing power, but how can it be computed?
Difficulty? It is too slowly updated.
What is your variants?

Yes...
But what you describe is only possible after someone have noticed and prooved the network split is happening.
Do you propose any method to detect the beginning of the network split?

Why do you think, that what you describe will be the only reason for a Bitcoin network split?
And if some people will know that a continent is disconnected, then why all others will be as informed?
And even if everyone will know, that some amount of Internet is disconnected from the rest, then
how would they decide whether that is a good reason to stop processing (and sending) transactions?
ISP disconnectivity is not a rarity today, single misconfiguration may shutdown routing for a whole AS.
Will that be enough reason to stop processing transactions or not?
The same with a country and continent.

The question is not wheter there exists some parts of Internet or Bitcoin network, that will reconnect later.
You may always answer YES here, at every moment they exists. My phone loses signal very often, for example.

The actual question is

It is not possible to give a definitive answer about future, but you may estimate that almost accurately based on the size
of the network before the split and the size of the network after the split.
If your network is not going to be a majority later, then it is safer to use another payment method, I suppose.

No, I am saying that given enough bitcoin users this is likely to happen, there is no need for them to notice that the bitcoin network split, either they notice that they can't check email/access websites outside of their local area and initiate a temporary alternate connection to the "rest of the world" or they just happen to take a laptop with bitcoin on an airplane.

I am also not saying it is a good thing.  having a single split for a fairly long period of time lets people come up with a solution, having many splits that each last for a few hours means that transactions randomly disappear and that hurts confidence in the system.

It doesn't have to be someone trying to cheat.  You can be honest, and yet unlucky and get caught on the other side of a network split.  If you generate and spend coins on the unlucky side of the network split, the consequences are the same as for dishonest users.

I started another thread along this line elsewhere, but for an individual vendor, a simple watchdog daemon that tracks the average time between blocks since the last official change in difficulty and alerts the vendor if a single block takes more than twice as long as the average, perhaps suspending the acceptance of new coins until the vendor checks to see what is happening.  Each block in a row that takes longer than the average increases confidence against a false positive.  So if one block takes twice as long as average, followed by a series of blocks that take 75% longer than average, then you can be fairly certain that you are no longer on the majority network.

creighto: I agree with that idea.  After a few hours, it should be possible for the client to notice if the flow of blocks has dropped off by more than would be likely just by chance.  It could tell if it's not hearing the hum of the world anymore.

In practice, splits are likely to be very asymmetrical.  It would be hard to split the world down the middle.  More likely it would be a single country vs the rest of the world, lets say a 1:10 split.  In that case, it would take the minority fork 10 times as long to generate 100 blocks, so about 7 days.  Also it would be super easy for the client to realize it's hearing way too few blocks and something must be wrong.

There's no time limit.  Assuming you weren't spending coins generated in the minority fork, or spending someone's double-spends you received, your transactions can get into the other chain at any time later.