We know if a majority (in terms of hash power) of nodes form a coalition, they can basically reap all the rewards by refusing to add blocks mined outside of the coalition to chain. However, this also severely damages security of Bitcoin as the same coalition can also mount double-spend attacks. It is very likely that this will drop the value of currency and hence, might be unprofitable for miners.
This requires only a majority of hashpower, and not a majority of nodes.
However, I wonder what happens if the majority just decides to agree on a lower PoW difficulty and hence, shorter block intervals. There seems to be some research that suggests Bitcoin might still be secure with shorter block intervals. See the quote from
https://www.coindesk.com/lower-bitcoin-block-time-scale/:
”According to my research the one-minute block interval seems like the most plausible. I don’t mean that it provides sufficient security, but that it would provide the same security as bitcoin has today.”
So my question is basically, is this behavior somewhat possible to observe in practice? Because if they do so, they will mine blocks more often and the blocks mined by others who follow the real difficulty will be valid too.
Every full node client (including those that are not participating in mining) would reject the blocks that are created with insufficient difficulty (regardless of the length of the chain). The rule isn't that the "longest chain wins", the rule is that the "longest VALID chain wins." If a majority of hashpower were to cooperate in mining these lower difficulty blocks, then it would result in a fork such that anyone that isn't running a compatible node or wallet would never see any of these lower difficulty blocks, and anyone that is running a compatible node or wallet would see only these lower difficulty blocks.
If a minority of hash hashpower were to cooperate in mining these lower difficulty blocks, then their blocks would continually be orphaned by the longer chain of normal difficulty blocks.
