What Miners Should Know about the New Bitcoin Cash
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People are talking about Bitcoin hard fork that happened yesterday, the August 1st. Each news website covers certain aspects of this event. Some talk about Bitcoin getting a software upgrade, while others focus on the implementation of the new ’Bitcoin Cash’. Looks like after all, we’ve got two news in one. Let’s try to understand what really happened and how we, as miners, can profit from this.
Act I: Bitcoin Getting and Upgrade
It’s no news that until today Bitcoin was getting slower by the day. With a hard limit of only 7 transactions per second, Bitcoin was no longer able to deal with the growing popularity it was getting. Eventually, this limit would lead to the death of the cryptocurrency simply because people would get frustrated and would stop supporting BTC.
In order to prevent that, developers decided to perform a software upgrade called ‘Segwit2x’. The upgrade was ready to be implemented some time ago, but developers were not able to get a consensus on whether the Segwit2x was the optimal solution to BTC scaling issue. Now that the cryptocurrency has reached a critical point, most developers finally agreed to implement the upgrade.
Act II: The Birth of a New Altcoin
As always, it is not possible to please everyone. Eventually, there is a group of people who dislike Segwit2x at the point that they decided to create a new altcoin. They called it ‘Bitcoin Cash’ and it is meant to replace the old Bitcoin. It has bigger block size and in theory it is meant to be technically more advanced that the ‘good old’ Bitcoin.
Those two events happened the same day. As soon as the Segwit2x was implemented, Bitcoin Cash was delivered to BTC holders in order to give them an alternative. This gave people the feeling that “Bitcoin split into two currencies”. What we really see here is the birth of a new altcoin – or that’s how most experts and investors call it. Few people believe that ‘Bitcoin Cash’ will replace the original BTC in any way.
Bitcoin Cash
Not all investors are supportive of this new altcoin. People are usually reluctant of investing into something new. However, many speculate that Bitcoin Cash will gain more trust and popularity since now BTC holders automatically got equivalent funds in Bitcoin Cash.
As for today, some of the most popular online wallets such as Bitstamp and Coinbase are not supporting Bitcoin Cash.
Bitcoin Cash’s lead developer Amaury Sechet is pleased by the support this new currency is getting. He told CNBC that: “The current price may [seem] low but this is actually an amazing level of support.”
Bitcoin Cash Mining
As a miner by heart, you probably already wonder how to mine BCC. Or how profitable is it to mine the coin to begin with.
Good news is – the first block was already mined a couple of hours ago by a mining firm called ViaBTC, which means that Bitcoin Cash is not a myth and that it can be mined.
Bad news is that it took them rather long to mine the first block. According to CNBC, “[…] Bitcoin cash required the same amount of computational work as Bitcoin[…]” and furthermore, “The fact the block is taking so long is making people reevaluate”
This means that as for today, mining Bitcoin Cash might not be the best option out there. BCC is worth a fraction of BTC while having roughly the same mining time. People who mine BCC are those who believe that it will replace BTC someday soon. As for today, mining BCC is probably pretty much the same as investing into stocks of a new company which might, or might not flourish in the future.
If you want to mine BCC, there is one pool available at the moment. This video shows how to start mining on ViaBTC.
Note: There is an expected difficulty reduction for BCC that will take place in about two weeks due to the BCC mining community being smaller than the BTC one.
In Conclusion
While Bitcoin Cash is not the new Ethereum, there is chance that it might affect the mining community in unexpected ways. I am keeping an eye on how this coin evolves. Some people are hyped about it, others hate it, but few remained neutral to the news. What about you? Will you buy or mine it?
Correction. SegWit is technically way more advanced than Bitcoin Cash. Bitcoin Cash is just a block size increase, nothing more. It preserves the high mining fees so greedy and unethical Chinese miners with their ASICBOOST exploit can continue making hundreds of millions every year. The core thing to realize here is a block size increase doesn’t fix many of the other Bitcoin problems that SegWit addresses. A block size increase won’t descale the other problems at all — it just kicks the can down the road. Due to the lack of hashing power, Bitcoin Cash is now at almost an hour just to find a block and the difficulty reductions will be very slow in coming to induce more hashing power. Bitcoin Cash is a shitcoin at present. What’s the use case to get a non-advanced shitcoin out of the toilet bowel? Purist philosophy doesn’t presage mass adoption.
All that being said, its nice to have another shits and giggles coin in my wallet. You never know what will be The [next] One. It’s up to the end users to decide that, not the miners and not the developers.
Interesting point of view – definitely not something that most news say anyway.
Does that mean that those devs/miners who opposed to SegWit2x did that mostly because of greed?
Also, do you think that Chinese companies (like Via BTC) sponsored Amaury Sechet and his team to create the altcoin?
That’s just my reading of the facts and the ideological sentiment. I have no stake either way.
Devs/miners were always opposed to SegWit; but the miners got onboard because of SegWit2x which promised a block size increase three months later on top of the SegWit… which at this point is not guaranteed since intention and walking the talk with a hard fork for the block size increase are two separate things. Besides being greedy, the 8MB block size for Bitcoin Cash resolves the size problem right now, today, immediately! that SegWit doesn’t. Sledgehammer vs screwdriver. Short term thinking vs long-term thinking. It’s typical greedy, grabby Chinese mentality. They haven’t grown up yet.
Devs have never uniformly supported SegWit (or chain splits) in general due to implementation and bug testing concerns, but since SegWit is a Bitcoin Core proposal already baked in the cake that nodes merely have to turn on, devs don’t really have much say in the matter. If they decide not to support it in their software for whatever inane reason, then we’ll have three factions. It’s just ridiculous.
Fortunately, the first mover, network effect of Bitcoin Core isn’t going away. That alone is enough economic incentive to stick with it.
Don’t know about that conspiracy theory, but it is interesting that Bitcoin Cash just popped up out of nowhere at the last minute. It’s essentially Bitmain’s UAHF without being conditional. I think saying they “created” Bitcoin Cash is vastly overstating what went in terms of just changing three lines or so of code of Bitcore Coin to support a 8MB block size. It’s not a carefully thought out, long-term vision. And both Bitcoins still have the hard 32MB technical limit. It’s easy to guess which will deal with that problem long-before the fact (hint: its not the Chinese solution).
Look, I think that five developers holding power over Bitcoin Core really sucks, but a knee-jerk reaction to protect mining profits in terms of sponsoring a shitcoin knock-off is hardly worthy of substance. Best case at this point is if Cash merges back into Core when the latter is due for its block size increase hard fork. And pigs will fly.
As Warren Buffett would say, competition is a wonderful thing!
Regarding the last question, the BTC jump of ~1K USD this week might answer your question. I see an interest in creating the “fail” alt-coin with a devious purpose. It worked flawlessly in the short-term.
Here is the thing. All we wanted was bigger blocks. All of this “scaling” bullshit was made up by bankers to make us mess up Bitcoin by trying to compete with them. We’ve never needed to. They cannot compete with us because we DO NOT NEED TRUST (something they cannot do business without because they also cannot do business without being able to LIE). SW/LN is a return to trust. If it hasn’t been included in a block, I have to trust that it eventually will. Bigger blocks gives us what we want without changing the trust-model (no trust needed) of Bitcoin.
-Oz
SegWit2x is a joke. Bitcoin Cash is much better. This Bitcoin November hard fork is a quick fix that fixes absolutely nothing. All it does is cause confusion to the Bitcoin community. But of course, your comment is from 3 months ago. As you can see, Bitcoin Cash is 2nd to Bitcoin. And the only coin that is capable of replacing Bitcoin totally.
It won’t replace it when its identical. The ideological premise it is based upon is hollow. And a store of value != monetary currency.
There are very few people I have met and asked “What do you know about Cryptocurrency?” that know what it is. But, when I say “You know, Bitcoin.”, They say “Oh, yeah, I’ve heard of that” but have no real understanding of it, plus the fact that their comment after that is “Isn’t it illegal?” doesn’t help. It’s plain to see that the majority of the people have no clue about the split or the inner workings of the coins themselves. So, I believe that when it comes to mass adoption, people will lean towards what they know and it’s going to be Bitcoin and not any of the altcoins. But of course, this is only speculation, as I can not see the future . Now for us crypto enthusiasts, as Hannibal mentioned, we will at least throw it into our shitcoin portfolio simply because you never know. The fact that these coins are so volatile and the price can shoot up to a high never reached before and make an overnight millionaire. My answer to the question is Yes, I will invest in BCC, but not because it will be the next global currency, but because it is another coin to trade, helping me generate Bitcoin that is already accepted as a currency for many vendors and venues worldwide.
The only legit replacement for the original Bitcoin is Bitcoin Cash. Because it does everything better and more efficient. SegWit2x is a complete joke IMO.
Bitcoin Cash has done nothing different than Bitcoin so far. It’s all ideological with no implementation of anything novel. The failed SegWit2x was just an attempt to scale on-chain but the Bitcoin fanboys don’t care about the original vision anymore, so now BCC has a slim chance if they walk the talk.