The Bitcoin Cash ABC community and project are led by the Bitcoin Cash evangelist, Roger Ver and the co-founder of Bitmain, Jihan Wu. Miners …
Charlie Lee, the creator of Litecoin recently sat down for a talk on the latest episode of Magical Crypto Friends with Samson Mow, Riccardo Spagni and WhalePanda. They discussed the latest development in the crypto ecosystem including the BCH hard fork that resulted in the formation of BCHABC(now simply known as BCH) and BSV.
The Bitcoin Cash ABC community and project are led by the Bitcoin Cash evangelist, Roger Ver and the co-founder of Bitmain, Jihan Wu. Miners supporting BCHABC include BTC.com, Antpool, and Bitcoin.com. This version of BCH aims to preserve the original functionality and vision of the Bitcoin Cash network and currently preserves the block size of 32MB. However, because the hard fork is technically an upgrade, there are some improvements.
Bitcoin Cash SV is supported and led by Craig Wright, dubbed “Fake Satoshi.” The miners supporting his vision include Coingeek and Bitcoin.org. The changes to Bitcoin Cash in this hard forked chain are far more dramatic than BCHABC’s changes. For one thing, block size has quadrupled from 32MB to 128MB. As well, changes to the protocol have been made to ease the transition to smart contracts on the BCHSV network.
Basically, the blockchain that receives the greatest amount of hash power (mining power) will become more secure with a longer blockchain. The network that fails to gain the majority of hash power will lose momentum and the miners will move on to mine the more successful and longer blockchain.
This, according to Charlie Lee was pretty disappointing. They even highlighted the centralized nature of Bitcoin Cash ABC. This was triggered by their checkpoint feature. The checkpoint demands formation of the first Bitcoin Cash ABC block as a new protocol rule. Any chain without this block would be considered invalid by the Bitcoin ABC software client. This has the consequence that rival miners will be unable to override the complete Bitcoin Cash ABC chain. This notably is one of the possible threats in a “hash war.”
According to the people on the panel Satoshi would have never approved of such a thing. Riccardo Spagni, the lead developer of Monero said:
“Monero still has checkpoints hard-coded checkpoints up to certain block ID. you know I mean I don’t think fundamentally is an issue with, that especially when you’re young, but I mean it needs to be done with a view to removing it that the issue here not checkpointing per se. it’s more this whole like large relay prevention thing which is dumb idea longitude”
To this Lee added:
“So basically like I think the whole the whole point of this decentralized consensus is based on this simple fact that anyone can spin up a node and know that they will be on the right chain right they don’t have to trust anyone.”
The panelists spoke about other various topics too in their insightful discussion. You can watch the entire episode on:
Indeed, at that point, the two most prominent cryptocurrency hard forks — Ethereum Classic and Bitcoin Cash — had each proven to be a boon to …
Around this time last year, many retail crypto investors subscribed to the economic theory that cryptocurrency hard forks — the ones that result in irreversible network splits and create new blockchains — were a net positive for their portfolios. “How could they not be?” they asked. “It’s free money!”
Indeed, at that point, the two most prominent cryptocurrency hard forks — Ethereum Classic and Bitcoin Cash — had each proven to be a boon to investors who held on to the coins on both sides of the split. However, both of those forks occurred either shortly before or amidst a historic crypto market rally that masked weak fundamentals in a variety of projects. Absent the sort of black swan event that the cryptocurrency market experienced last year, it seems that when it comes to truly contentious hard forks, the whole may be less than the sum of its parts.
Bitcoin Cash Price Craters in Month Following Fork
As evidence, one need look no farther than Bitcoin Cash (BCH), which is itself now reeling in the wake of a contentious hard fork that took place in the throes of a prolonged bear market rather than a retail-driven market upswing.
Before the fork, the bitcoin cash price was trading near $500 with an ~$8 billion market cap that ranked fourth among cryptocurrencies. In the month since, BCH has declined to just $82 on Coinbase, representing a more than 80 percent decline. If one subscribes to the “Bitcoin Cash is Bitcoin” philosophy, then the bitcoin price is trading at its lowest price since early 2013. Even if you don’t, bitcoin cash has still fallen 98 percent from its all-time high and now sits at a record low.
Part of that lost economic value did not exit the Bitcoin Cash ecosystem completely but rather migrated to a separate BCH-derived crypto network.
Following the fork, that new cryptocurrency — Bitcoin SV (BSV) — was created, and despite some early struggles its coin price managed to catch up to BCH. At one point, bitcoin sv even surpassed BCH in total market capitalization, though it quickly slunk back below its older sibling and more or less faced a similar plight in the days hence. As of the time of writing, BSV was priced at $77 on Kraken, roughly $5.50 below BCH.
BCH & BSV are Also Plunging against Bitcoin (BTC)
However, the drop cannot merely be attributed to the general market decline, as the combined value of BCH and BSV has also plunged against market bellwether bitcoin (BTC). Prior to the fork, BCH was already trading near an all-time low at approximately 0.08 BTC. Now, bitcoin cash and bitcoin sv are worth a combined 0.048 BTC, and that number shows no signs of finding a bottom anytime soon.
It’s unclear what the future holds for bitcoin cash, bitcoin sv, and the crypto sector at large. However, at least right now, it seems that traders are not confident that both BCH and BSV can thrive over the long-term. Until the market can definitively sort out which of the chains is the true economic heir to the pre-fork BCH, both of them may be fated to play increasingly smaller roles in the crypto marketplace.
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Lee added the Bitcoin Cash hard fork and the floundering initial coin offering, or ICO, market to his list of factors that weighed on cryptocurrencies in …
Monday, Dec. 17, will mark one year since the price of bitcoin — the best-known cryptocurrency — hit an all-time high just shy of $20,000. For bulls who bought the hype, it’s been a long — and painful — ride down.
At the time, the digital currency was up more than 1,000% for 2017, both the CME Group and Cboe had just launched bitcoin futures contracts, and everyone seemed to be making money as talk about the previously obscure crypto market made its way into the mainstream media.
In retrospect, it appeared all too easy: Bitcoin rose 11 of the 12 weeks leading up to the Dec. 17 peak and logged gains in eight of the last nine months in 2017. Day traders were millionaires, analysts were predicting further drastic price increases and investors jumped on what looked like an endless gravy train.
According to Crypto Fund Research, 85 crypto-related funds launched in the first three months of 2018, and at Jan. 1 2018, there was $5.8 billion of assets under management in the crypto hedge fund industry, compared with $675 million a year earlier.
But, in the blink of an eye, the tide turned: A January correction soon turned into a collapse and then turned into what was dubbed a prolonged crypto winter — a season that has yet to end.
From their peaks, most major coins lost more than 80%. Bitcoin BTCUSD, -2.17% has shed as much as 85%. Ether, ETHUSD, -1.58% the popular currency that runs on the ethereum blockchain, fell as much as 95%, losing its title of the second-largest digital currency.
There were warnings, of course. JPMorgan Chase & Co. JPM, -0.99% Chief Executive Jamie Dimon called bitcoin a “fraud” in September 2017, though he later said he regretted using the word. Billionaire investor Warren Buffett called bitcoin mania a “mirage” and predicted it would “come to a bad ending.” And they weren’t alone.
After a stellar call in late 2016, when Kay Van-Petersen of Saxo Bank said bitcoin would rise to $2,000 in 2017 — a feat achieved five months into the year — the analyst told CNBC in January that bitcoin could trade as high as $100,000 in 2018.
“First off, you could argue we have had a proper correction in bitcoin, it has had a 50% pullback at one point, which is healthy. But we have still not seen the full effect of the futures contracts,” he told CNBC.
On the heels of Van-Petersen, venture capital guru Tim Draper, who famously purchased around 30,000 bitcoins in 2014 from the Silk Road bust, said the price of a single bitcoin could trade as high as $250,000. Draper can say he has time on his side, saying it would take until 2022 for bitcoin to reach the quarter of a million milestone.
Former Goldman Sachs partner and hedge-fund manager Mike Novogratz was another who called the run-up in digital currencies, saying in 2017 that bitcoin would reach $10,000. However, after riding the wave up, Novogratz said on Sept. 13, with bitcoin trading around $6,300, that he believes the low for 2018 was in and a week later he told CNBC that he sees a potential 30% rally by the end of the year.
Another who thought bitcoin would base around $6,000 to $6,500 was Dan Morehead, chief executive and co-chief investment officer at Pantera Capital Management. In April he said widespread adoption would propel bitcoin to a new high.
“I rarely have such strong conviction on timing. A wall of institutional money will drive the markets much higher,” Morehead said in the company’s April newsletter.
Elsewhere, perennial bitcoin bull Tom Lee said in July that he’d rather own bitcoin than equities, putting a price target of $25,000 by the end of the year. As the cryptocurrency continued to stumble, Lee dropped his price target to $15,000 in November.
Since Lee’s July 5 call, bitcoin has fallen 48% compared with the S&P 500, SPX, -1.97% which has fallen 3.1%, the Dow Jones Industrial Average, DJIA, -2.15% which has gained 0.9% and the Nasdaq Composite, COMP, -2.09% which has lost 6.8%.
The head of New York-based Fundstrat Global Advisors said bitcoin’s network value, coupled with a supply model that uses break-even mining costs to value bitcoin puts the fair value of the largest cryptocurrency between $13,800 and $14,800.
Now, 12 months since the peak and two weeks out from the end of the year, many analysts are in a reflective mood. Lee said a number of factors lead to the underperformance of the broader crypto market, including regulatory hurdles, industry disagreements and a generally risk-averse, global market environment.
“Global markets have seen massive de-risking, and this resulted in further selling pressure on bitcoin. Consider that some holders of bitcoin have large exposure to FANG or equities (Silicon Valley entrepreneurs, for instance),” wrote Lee, in a note to clients. FANG is an acronym referring to previously highflying, large-cap tech shares, including Facebook Inc. FB, -0.41% Apple Inc. AAPL, -2.79% Netflix Inc. NFLX, -2.17% and Google parent Alphabet Inc. GOOG, -1.78%GOOGL, -2.04%
Lee added the Bitcoin Cash hard fork and the floundering initial coin offering, or ICO, market to his list of factors that weighed on cryptocurrencies in 2018.
Investment in ICOs stalled in the second half of 2018 as a number of regulatory rulings turned investors off the alternative method of capital raising. In November, the Securities and Exchange Commission slapped two companies with fines for launching unregistered coin offerings. The ruling was the first nonfraudulent case, meaning the companies could continue operations once they registers the tokens as securities.
A hard fork occurs when developers and miners no longer agree on a proposed change to the software, despite operating on the same blockchain. Once the fork takes place, one group of so-called nodes — computers that are connected to the network and are part of the transaction confirmation process — will upgrade to the new software and the other will operate on the old rules, creating two separate blockchains and digital currencies.
For Novogratz, he agreed the contentious hard fork played a role in bitcoin’s underperformance.
“It felt like the selling was finished. But then Bitcoin Cash decided to fork again,” Novogratz told Bloomberg in Dec. 11 interview. “At the same time the SEC came out and sanctioned a few ICOs and said, ‘Oh, by the way, your investors can sue for damages.’ That scared the heck out of a lot of people.”
The crypto community heaved a sigh of relief after the hash wars of Bitcoin Cash (BCH) ended on the 23rd of November. The Hash Wars started on the …
The crypto community heaved a sigh of relief after the hash wars of Bitcoin Cash (BCH) ended on the 23rd of November.
The Hash Wars started on the 14th of November, as a result of a disagreement between the two factions of the BCH community on which upgrade to implement. This then led to a big battle between one camp led by Craig Wright (Bitcoin SV) and another by Roger Ver and Jihan Wu. The two camps eventually came to an agreement to fork the BCH blockchain.
Mr. Wu is the present CEO of Bitmain. Bitmain specializes in designing ASIC chips for Bitcoin mining. The company also operates two of the largest Bitcoin mining pools: Antpool and BTC.com.
The initial signs of trouble at Bitmain began before the Hash Wars when it was reported that Jihan Wu had lost his seat as the board executive director of the company after a board reshuffle. He was replaced by Zhan Ketuan.
We had no idea as to why the reshuffle was done but on the same day, 90,000 miners were hurriedly deployed in China’s far-western region of Xinjiang to mine Bitcoin Cash ABC, which is the current BCH.
According to research by a Bitmex team, the joint loss by both camps due to the BCH hash wars could well have exceeded $10 Million. Bitmain has also closed down its Israeli Blockchain development center, citing crypto market conditions.
Soon after the hash wars, UnitedCorp launched a suit against Bitmain, Bitcoin.com, Roger Ver, Kraken Bitcoin Exchange and others, claiming they had hijacked the Bitcoin Cash Network after the November 15th hard-fork.
Additional rumors circulating on Crypto Twitter indicate that Bitmain might be liquidating its BCH stash to pay off supplier debts totaling $600 Million.
If the reports of Bitmain’s financial woes turn out to be true, it explains why Bitcoin Cash has continually fallen from the number 4 spot on coinmarketcap.com, to its current number 7 ranking. Before the hash wars, BCH was trading at around $500. The digital asset is now valued at $86 indicating a 83% drop in value in a period of one month.
If the Bitcoin Cash debacle taught us one thing, it’s that having decentralized leadership is messy. The hard fork, which in essence, was a war of words …
If the Bitcoin Cash debacle taught us one thing, it’s that having decentralized leadership is messy. The hard fork, which in essence, was a war of words between two conflicting personalities, lead to splits in resources, community and a price drop that left no real winners.
Bitcoin Cash was a hard fork of Bitcoin itself. This ability for the code to be altered, and allow others to take it in different directions has lead to a thriving cottage industry of developers who constantly tinker with the code and help it avoid bugs. However, without a clear leader, it has been split, and then split again, and in all likelihood, will continue to do so in future. Now an ex-Facebook strategist is arguing that this approach, while beneficial in the beginning, while ultimately lead to its downfall.
“Bitcoin is a headless organization,” Tomer Federman, CEO at crypto investment firm Federman Capital, said at Hard Fork Decentralized in London, adding, “First mover advantage doesn’t necessarily last long.”
Having a leader is a key sign of a strong project. While working at Facebook and developing projects that were to be used by billions of people, Federman learned that leadership and having go-to-market experience were the two most important facets of any project. In an interview with Decrypt, he said, “I prefer to see clear leadership and [a] much more efficient decision making process like we’re seeing with Ethereum.”
However, it is often argued that Nakamoto’s identity staying hidden is a good thing. The SEC has recently cracked down on a myriad of blockchain-based projects, mostly focused on fraudulent claims and ICOs. Even more, governments in the past have put pressure on private currency projects, such as e-Gold which was shut down in 2007 for not having enough information on its users. The co-owner of Bitcoin.org and Bitcointalk.org, who goes by the alias ‘Cobra’, told Decrypt, “him being anonymous allows Bitcoin to grow on its own terms, without the weight of a founder’s original “vision” and opinions having an outsized influence on the direction of the Bitcoin project. Because he’s no longer around, it’s much easier for Bitcoin to be shaped by its community of users and developers. It’s good [Nakamoto’s] unknown and gone, and hopefully, it stays that way forever.”
Federman said that despite this, anonymity isn’t essential. “Leaders don’t need to hide in the shadows just so the SEC doesn’t go after them. What needs to happen is regulatory clarity, so leaders know what they can or cannot do,” he said, adding, “The people we look up to are the Jeff Bezos, the Steve Jobs, the Bill Gates of the world and they’ve been visionary, they knew how to guide their companies through all this turbulence.”
Bitcoin seems to be plowing on nevertheless. Its share of the global cryptocurrency market cap has increased since May to 55 percent, from a low of 34 percent in January. It is also the most liquid over-the-counter market where large trades are made between high-net worth individuals, meaning it’s still the on-ramp for the industry. But, other cryptocurrencies are becoming more competitive, including Ethereum which has more than twice as many on-chain transactions daily. Satoshi’s pseudonymity helped make Bitcoin what it is but could ultimately bring it to its knees.