Why did Bitcoin Cash change its difficulty adjustment algorithm (DAA)?

Bitcoin Cash changed its difficulty adjustment algorithm due to challenges faced by previous iterations. After the 2017 split, an emergency Difficulty Adjustment Algorithm (DAA) was implemented to address potential issues with hashpower allocation. However, this emergency DAA led to significant oscillations in hashpower as miners switched between Bitcoin and Bitcoin Cash. Subsequently, the emergency DAA was replaced by the CW-144 algorithm, which, while offering improvements, still exhibited periodic oscillations.

In 2020, Bitcoin Cash underwent a significant upgrade with the adoption of the Absolutely Scheduled Exponentially Rising Targets (ASERT) DAA. ASERT employs an exponential moving average approach to consistently target a correction toward an average block time of 10 minutes. This implementation results in a dynamically adjusted difficulty, substantially reducing variations in block times and providing a more stable and reliable network.

Learn more about the DAA and other Bitcoin Cash technical features in our broad exploration of Bitcoin Cash upgrades.