Bitcoin cash mining profits jump

https://www.cnbc.com/2017/08/19/bitcoin-cash-soars-to-record-high-above-900-as-mining-profits-jump.html

by prostoalex • 9 years ago

42 89 9 years ago

cnbc.com

int_19h2• 9 years ago

So, is the combined price of BTC and BCH in circulation still more than BTC alone before the fork?

keypusher• 9 years ago

Yes. BTC went up significantly after the fork, and BCH is also climbing.

jstanley4• 9 years ago

Significantly so. The price of BTC alone is still more than BTC before the fork.

int_19h2• 9 years ago

How do cryptocurrency adherents explain this? I mean, that value has to come from somewhere.

As I recall, when the fork just happened, the explanation was that the price of BCH was largely meaningless, because you couldn't actually withdraw them as cash, either directly or via BTC or other coins. You could only trade within confines of exchanges where they materialized. Did that change since then?

wyldfire3• 9 years ago

As a result of the fork I now have independent currency on both chains?

If I think that Bitcoin Cash will ultimately not succeed, I should sell into this P&D, right?

AgentME• 9 years ago

If you actually have the private keys to your bitcoin (ie. you have your bitcoin in bitcoin wallet software on your computer such as in the official client or the electrum client), and you had them at the time of the fork (Aug 1), then yes. If you had your bitcoins held by a 3rd party like an exchange, then it's up to them to decide whether they want to support a fork like bitcoin cash at all and credit it to your account.

somenewacc• 9 years ago

Yes.

pyrrhotech• 9 years ago

correct. All indicators (miners not switching, 60% Korean volume, 0 dev support, plethora of FUD articles about core) are showing that it's a P&D and now is a great time to sell all your BCH back to BTC.

echelon• 9 years ago

Is there any chance that Bitcoin Cash becomes the preferred fork of Bitcoin? How likely would that be to happen?

jstanley4• 9 years ago

It is a possibility, of course, but I don't think it's very likely. Segwit is (finally) about to activate on BTC which means we'll eventually get Lightning Network on mainnet.

Segwit is not going to activate on BCH because the BCH proponents are ideologically opposed to Segwit.

Additionally, almost no businesses are taking payment in BCH. BCH has to build its ecosystem up from scratch like any other altcoin. I think it has similar chances of "overtaking Bitcoin" as, for example, Litecoin.

EDIT: I don't know why the BCH price has gone up so much. It's almost certainly in even more of a bubble than BTC is currently in.

theprotocol7• 9 years ago

Segwit is not necessary for Lightning Network. It's a false dichotomy: on-chain scaling does not preclude off-chain scaling (which is what LN is).

Bitcoin with Segwit will prioritize off-chain scaling (hence the 1MB blocksize limit and the current moves to prevent increasing it to 2mb), while Bitcoin Cash wants to enable on-chain scaling as the mainstay; but by no means are they mutually exclusive.

The Segwit activation raises new questions and concerns: the agreement to proceed with Segwit was a compromise known as Segwit2x (Segwit + 2mb blocks). Now it appears much of the Core team has no intention of honoring the 2x part (see core software 0.15 changelog: it will block any nodes signaling for segwit2x). Yet the 2x part is locked in - meaning we are currently headed towards a hard fork.

ringaroundthetx3• 9 years ago

Flextrans will provide the capability of Lightning Network on Bitcoin Cash as well.

The only point for BCH is that transaction congestion won't force people to use layer 2 settlement layers, as there is a philosophy of an onchain scaling solution as well where transactions will remain cheap.

The block reward will still be supplanted by transaction fees in this solution, eventually. Whether with blocks being extremely large, or with a few halvings later.

Flextrans wouldn't be implemented solely for the lightning network. It would just be possible to do that as well.

edit: annnnnd a downvote without even a rebuttal, reminds me of a bitcoin reddit. a little disheartening.

ericb4• 9 years ago

BCH has to build its ecosystem up from scratch like any other altcoin.

Perhaps, but BTC is throwing its ecosystem away with a core team that is committed to congestion and high fees. Bitcoin Cash already has the customer side of the customer-vendor double-sided marketplace handled as well as Bitcoin does because they have approximately the same distribution among bitcoin owners.

It isn't the same hurdle as litecoin--half of the chicken and egg problem is already solved. Because of the fees, and the damper they will place on sales, there's an incentive to switch to boot.

mtgx• 9 years ago

I imagine it has something to do with availability at exchanges from day one of launch.

lawn3• 9 years ago

Lightning Network wants non-full blocks to work properly. It needs to be able to settle reliably in the future, full blocks destroys the predictability.

Also LN does not need a malleability fix to work, it just makes the implementation easier.

exit• 9 years ago

for now at least, it doesn't look like significant mining effort has switched chains: http://fork.lol/pow/hashrate

davidgerard4• 9 years ago

Not any time soon. At present it's an altcoin with the main sponsors (Roger Ver and ViaBTC) still trying to push it along in the hope of organic trading action starting.

kobeya5• 9 years ago

No chance among those who understand how and why bitcoin works. An unlimited bitvoin is worthless because it could be replaced to centralize ledger, and will be eventually. Bitcoin is in extraordinarily inefficient system that would serve no purpose if not for the decentralization that limits protect.

smokeyj• 9 years ago

As someone who understands Bitcoin - I have no idea what you're talking about..

rothbardrand12• 9 years ago

Highly unlikely. BCH is the result of non-technical people who do not trust new technology in bitcoin an wanted a coin they could control.

%98 of BCH is mined by one entity.

They wanted their own bitcoin and they have it now and they are pumping it, but they don't have a decent development team and their motives are not good.

rasmus1610• 9 years ago

I resisted buying BCH because I just don't think it has the same long term value as BTH like almost any altcoin. Hope I don't regret this decision in 6 months

trophycase2• 9 years ago

Trader here: It's a pump and dump. Don't worry about it

ericb4• 9 years ago

I'm not so sure. There are a lot of people who wanted bitcoin to serve the cash use-case who aren't convinced core will keep bitcoin low-fee and workable as anything other than a settlement layer. Bitcoin cash is closer to the original vision.

Signs I'm watching:

* Merchant adoption

* bitcoin-abc doesn't have any commits in the last 21 days.

* Mining has not diversified (yet) so this doesn't appear to have gathered tons of support and it is really centralized. https://cash.coin.dance/blocks

SilasX2• 9 years ago

I assumed as much myself, but after a few weeks of BCH sustaining a non-trivial trading value, it's hard to keep faith in that hypothesis.

JumpCrisscross2• 9 years ago

You still can't redeem and cash your Bitcoin Cash from Coinbase, correct? If Bitcoin Cash crashes before they implement their fix, I'd fully expect them to be liable for customers' losses.

rocqua2• 9 years ago

I wouldn't be surprised if people are just switching back and forth between BCH and real cash to inflate the transaction numbers. Hypothetically, this would be done to further the political goals of those who want to increase the blocksize.

lawn3• 9 years ago

Could be. Could also be the beginning of a major movement from Bitcoin to Bitcoin Cash, which is something to be worried about.

As a trader you should know not to certain, you're only trying to make educated guesses.

rothbardrand12• 9 years ago

Bitcoin expert here: It's a pump and dump. Don't worry about it. It might survive but as the China State Coin.

hans0l074• 9 years ago

N00b/ELI5/Ask HN question : Where is all this money coming from?

rastapasta• 9 years ago

From people who are willing to exchange 'real'-money backed numbers ('fiat') with might-have-some-worth-soon numbers.

rocqua2• 9 years ago

Not all the quoted money is actually there.

The only real money being spend are the transactions on the exchanges. There, it becomes hard to differentiate many 'real' buys of bitcoin cash from someone just flipping back and forth between the two.

eswat• 9 years ago

Other than Bitcoin Core most of the popular alt coins have come down in price during this rally so many traders are just exchanging one cryptocurrency for another.

Animats2• 9 years ago

The next regular difficulty adjustment took weeks to reach after the mining power decreased. It was hours between blocks for a while. Now new blocks are mined every 10 minutes again, which makes mining cost-effective again and allows transactions to go through. With a lower difficulty and a $800+ price, Bitcoin Cash mining looks good right now.

The "market cap" for BCH has to be way overestimated. It assumes there's a BCH for every BTC. But there isn't. Not everybody got their converted asset out.

ringaroundthetx3• 9 years ago

Just trade it with that in mind. Bad news for commodities typically means a constriction in the supply with the same amount of demand. Price goes up, just like with oil or orange juice prices.

People thinking about bitcoin like a company's stock or the stock market contribute to why they can't comprehend the train wreck to all time high prices.

Hopefully there will be good ways to go bearish by the time Coinbase enables Bitcoin Cash.

danmaz74• 9 years ago

Hopefully there will be good ways to go bearish by the time Coinbase enables Bitcoin Cash.

You can short it on Bitfinex...

richardw2• 9 years ago

So if I have btc I don't necessarily have BCH unless I did something? I didn't know there was a time window.

rothbardrand12• 9 years ago

All of the BTC you had on August 1st, 2017 was replicated on the BCH chain when they forked off of the BTC chain.

Depending on your wallet there are mechanisms to separate out your BCH and BTC (Because it's a fork you need to be careful about this, as replay attacks might be possible.)

See your wallet maker for specific advice

sillysaurus32• 9 years ago

This is all completely hilarious. I mean think about what all of us are doing here. These coins only exist because we believe they exist and have value. I'm not naysaying -- it's legitimately funny. We're building rigs to "mine" internet coins like a slot machine that only costs electricity, and some of the world's smartest people have spent so much time thinking about it and building on it. And now we have Bitcoin Cash which is nipping at 25% the value of Bitcoin. That means anyone who bought at $300 just 3x'd their money. 3X! Do you know how hard it is for like almost anyone in the world to triple their money? I know BTC went up by like 130% in the last 60 days, but BCH is now theoretically a separate store of value. And you only 2x'd your money on that old crufty BTC. Cool kids got 3x on BCH.

The whole thing is just amazing and absurd and absurdly amazing.

tradersam• 9 years ago

By that same token (lol), isn't it hilarious what the U.S. is doing here? Money in our bank accounts only exists because we believe they exist and have value. The $100 bill in my back pocket would only be useful to wipe my ass if everyone else didn't value it.

Cryptocurrencies are brand new, so they're incredibly volatile, sure. But it can be "real money" just as much as money, because really what is money?

An idea.

rothbardrand12• 9 years ago

Markets can be quite irrational in the short term, especially when people don't realize how centralized BCH is.

SilasX2• 9 years ago

Basketball points also only exist because we believe they exist and have value. We're building stadiums and hiring refs and training athletes and maintaining rulesets and running games, which all use up a ton of resources and take up time from very expensive humans (players, engineers, logistics experts, coaches, statisticians), all to feed an arms race for getting more of those points.

Animats2• 9 years ago

That's what I thought when Bitcoin crashed from $30 to $17 in 2011. I wrote "There's no revenue model here. All growth comes only from new investors. This is a bubble in its pure form."

What I didn't see was that the use case of getting money out of China was enough to propel Bitcoin to thousands of dollars. When that started, it looked like the People's Bank of China was going to ease up on exchange controls and crack down on Bitcoin. The PBC did neither.

"The mountains are high and the Emperor is far away."

grey-area2• 9 years ago

But you can't actually get your money, unless you find someone credulous enough to buy these coins for another currency.

The absurd figures both in the growth of BTC over the 2 years (1700% gains!) and the sudden materialisation of value ex nihilo for BCH at 25% the market cap of bitcoin should be a good sign that this market is almost entirely based on speculation and could melt into thin air very soon, though it may well break new records before it does. Anyone getting in to either currency at this point is IMO going to lose their money.

https://bitcoincharts.com/charts/bitstampUSD#rg730ztgMzm1g10...

bdcravens2• 9 years ago

Worth noting that in the past 18 hours it has dropped about 25% from its recent high.

lawn3• 9 years ago

Note that Bitcoin Cash will have a difficulty reduction at block 479808 (in 62 blocks as of this writing) projected around 30% further increasing the profitability vs Bitcoin [1]. It is now 52% more profitable to mine Bitcoin Cash [2].

[1] http://bitcointicker.co/bccnetworkstats/

[2] https://cash.coin.dance/blocks

cesarb2• 9 years ago

There's a twist to this profitability statistic, which I haven't seen mentioned anywhere yet: your reward for mining a block can be spent only after many other blocks are mined on top of your block.

That changes the game significantly. What matters for a miner is not "it's more profitable with the current difficulty and price", but instead "it's more profitable with the current difficulty and the price X blocks in the future". Moreover, once they've mined a block on one chain, it's in their interest to keep that chain alive and working well for at least X blocks, so they can convert enough of their reward into fiat to pay their costs. The obvious way to do it would be to keep mining on the same chain, which generates yet more block rewards to be claimed later. All that might make the chain choice somewhat sticky for the miner: once on one chain, it's better to keep on the same chain instead of switching every time the price swings.

rothbardrand12• 9 years ago

BCH is a hastily written hack job by a third rate team (I talked to some of them on twitter, they really don't understand a lot of what they are doing)... with a drastic difficulty retargeting algorithm. A bit of a pump combined with hash power manipulations lead to this.

This is all show to try and prop up the coin. Both the pump and the "profitability" of mining it.

%98 of the blocks of this coin are mined by an unknown entity-- in other words, it's not decentralized. It's trivial for that entity to manipulate the difficulty retargeting mechanism in his favor.

Stay away. This is not "bitcoin" in any sense.

davidgerard4• 9 years ago

This is all true, but none of it has ever affected interest in a cryptocurrency.

BTW, not even the one actual use case for bitcoin is interested in bcash: https://www.reddit.com/r/DarkNetMarkets/comments/6s30ss/have...

matthewbauer• 9 years ago

I wonder if "forking" Bitcoin will become the default method for new coins to be created in the future. It seems like it has advantages, you can pretty much "prove" that you have not premined your coin (although implementation of the fork still would be very important).

icedchai• 9 years ago

Sadly, I exchanged my BCH for BTC before this occurred. I missed out on those 2x gains! (Of course, these are all coins I mined years ago, so it's free money anyway.)

richardw2• 9 years ago

It seems the split created value. The derivative is worth what the original was worth not that long ago. Great in the short term but possibly means the combined value is less trustworthy. Derivatives of magic money I guess.

So what's to stop continued splitting until the public figures it out and then we all crash?

Bitcoin cash mining profits jump

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