Next morning of Bitcoin Cash: what now?

The Bitcoin split aftermath for Bitcoin and Bitcoin Cash
02 August 2017   2116

What happened 

Blockchain

Distributed database that is used to maintain a continuously growing list of records, called blocks

The Bitcoin blockchain hard fork finally happened: SegWit opponents launched a user-activated hard fork (UAHF) to create Bitcoin Cash, a cryptocurrency competing with Bitcoin. 

The morning after the event, let's have a look at the aftermath of it for Bitcoin and Bitcoin Cash.

Bitcoin

Is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen

To begin with, it's worth mentioning that the creation of first block took longer than the miners had hoped. Still, at about 6:14 p.m. UTC, ViaBTC mined the first Bitcoin Cash block (which was pretty ironic as ViaBTC was one of the main supporters of Bitcoin Cash), which came in at a block size of 1.915 MB. That block contained 6,985 transactions, according to public data.

Since then, several Bitcoin Cash blocks have been created, and Bitcoin Cash entered a new phase in which it became an actual network.

What now

One of the most intriguing questions is what will happen with the price of the two cryptocurrencies, which is now up to the market to decide.

Data at the time of writing on coinmarketcap.com Data at the time of writing on coinmarketcap.com

Bitcoin Cash

A new cryptocurrency representing a hard-forked version of Bitcoin, different from it in the blocksize limits

However, despite the seeming price surge of Bitcoin Cash (the cryptocurrency becomes the third-biggest cryptocurrency on the first day of creation) and price fall of Bitcoin (which is not so large), the public mood does not seem so excited as yesterday. Thus, Charlie Lee, the creator of Litecoin, sees no future for Bitcoin Cash:

As Brian Armstrong, co-founder & CEO at Coinbase, reports, the company will not rush to launch Bitcoin Cash trading:

Why is it so? Well, probably one of the answers lies in the Bitcoin Cash price. Thus, Artem Abaev, an expert in blockchain technology, posted on his social media an estimated price formula for Bitcoin Cash (note that the post had been published about 13h before the writing time, so some of the figures might be not completely updated):

Artem Abaev on Bitcoin Cash price
Bitcoin Cash price formula

As shown, the expert argues that the real Bitcoin Cash price is to be around $8. In the light of this fact, the prices shown at cryptocurrency exchanges, like Kraken, seem just insane. 

Moreover, the experts predict extreme volatility for Bitcoin Cash. Thus, yesterday, it surged to $422 just after the first block was mined. Afterwards it dropped to $383. Then the price rose again up to $433.

We'll closely watch what happens next and keep you updated. 

Bear Market to Hit Mining Hard

BitMEX research division presented an analysis of the impact of market decline on the mining industry
11 December 2018   75

The cryptocurrency market has experienced a marked decline over the past weeks. The BitMEX research division presented an analysis of the impact of these events on the mining industry. Bitcoin hash rate has fallen by 31% since the beginning of November, which is equivalent to the capacity of 1.3 million Bitmain S9 devices. From this, BitMEX concludes that miners as a class are in a difficult situation, however, they may have different conditions, and those who pay more for electricity, are forced to turn off their equipment first, while others may still be quite viable.

The decrease in the price of Bitcoin by 45% since the beginning of November has already caused two recalculations of the complexity of mining to the lower side - by 7.4% and 15.1% on November 16 and December 3, respectively. The first recalculation turned out to be the largest since January 2013, the second - since October 2011.

Bitcoin mining revenue fell from $ 13 million per day in early November to $ 6 million per day in early December. The fall in the size of the miner's encouragement turned out to be even more rapid than the fall in the price of cryptocurrency. This is due to the delay in recalculating the complexity of mining. For the six-day period ending December 3, 21.8% fewer blocks were mined than expected, since the miners left the network before recalculating the difficulty. As a result, in addition to reducing the size of the miners' encouragement in dollar terms, due to lower asset prices, they received 21.8% less bitcoin awards.

One of the popular reasons for the recent decline in the cryptocurrency market is that miners sold bitcoins to cover their costs of hash warsin the Bitcoin Cash network. The monitoring platform Boltzmann recorded an unusually large sale of Bitcoin by the miner on November 12, that is, 3 days before the hard fork of Bitcoin Cash.

BitMEX assumes that the actions of miners over the past weeks could have played a significant role in reducing the market, however, recommends not overestimating their value and reminds that in a bearish trend, prices continue to fall regardless of asset movements and news.