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

~~~
davidgerard
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...](https://www.reddit.com/r/DarkNetMarkets/comments/6s30ss/have_any_darknet_markets_announced_support_for/)

------
Animats
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.

~~~
sillysaurus3
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
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.

~~~
sillysaurus3
Exactly. But holy smokes:

The fact that both BTC and BCH exist now means that there is ${BTC + BCH}
market cap now, right?

If you put $3k into BCH and $3k into BTC, your investments will grow or fall
independently of each other, depending on how BTC or BCH does. But if BCH
reaches parity with BTC, that means the world now has ${2xBTC} of value in it,
right? I mean yes, set aside the question of what "value" means, but that's
what the numbers are showing?

In other words, BCH was one of the biggest things anyone could have done to
grow the Cryptocoin ecosystem as a whole, then? Coinmarketcap shows $68B for
BTC and $13B for BCH. Ethereum is $27B, and that took like four years to get
to this point.

So, true or false: BCH just created half the total value of ETH within the
last month or so?

What justifies this? Is everything going to explode? I need a mathematical or
investment framework to think rationally about the implications of this.

Are we in danger of any kind of "pop"? The 2008 housing crash affected the
world. Anyone know how big these babies need to grow before a pop would cause
problems for the world economy?

I'm not even convinced it _will_ pop. But I've also read Madness of Crowds,
and the temperament here reads identical to the worldwide investment craze
portrayed in it. It didn't last forever. (I guess once all the naysayers stop
naysaying about BTC, then it's time to worry. Till then, though...)

~~~
rothbardrand
Instantaneous price is not value. The concept of "market cap" for these coins
is ... fairly weak. It's not a good real measure.

We are going to have a massive crypto bubble-- this is fundamentally new
technology so its going thru the technology adoption life cycle and pops every
time it gets to a wider audience--- and it hasn't yet gone mainstream.
Everyone knows about it, but nobody trusts it yet.

We're at the point like in the 1990s when the idea of using your credit card
on the internet seemed foolish and just asking to lose your money.

Once people become comfortable with it we will have a massive bubble, fortunes
will be made and lost and it will make 2001 and 2008 look positively sedate.

I don't think BCH will still be around by the time that happens, though.

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

~~~
jstanley
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.

~~~
theprotocol
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.

~~~
jstanley
> Now it appears much of the Core team has no intention of honoring the 2x
> part

It's not a case of "not honouring" the 2x part; no members of the core team
were part of the NYA.

You can't come up with an agreement and then accuse people who didn't sign it
of failing to honour your agreement!

~~~
theprotocol
I tried being as neutral as possible but you're right that my language implies
that they signed it. I should've worded that differently. However, I still
wouldn't let them off the hook entirely: intentionally blocking nodes
signaling Segwit2x in 0.15 is definitely a political move. There are clear
sides that are forming; and I don't mean to make any value judgment here on
which side is "in the right." I'm simply trying to explain the volatility of
the current situation and the various points of contention between the groups
that are forming.

~~~
kobeya
> intentionally blocking nodes signaling Segwit2x in 0.15 is definitely a
> political move

This is incorrect. There was a straightforward technical reason given in the
pull request -- not enacting this change would likely partition the bitcoin
network when the split happens. A network partition could be a drastic event
that if exploited would result in much lost money and bankruptcy.

~~~
theprotocol
Can you elaborate? What kind of partition are you referring to? Thanks.

~~~
kobeya
A partition of the connectivity graph. Imagine we have two Bitcoin Core nodes
connected by an intermediate Segwit2X [sic] node:

    
    
        1X(a)  -----  2X  -----  1X(b)
    

When the 2x node starts relaying post-fork blocks, it is seen as misbehaving
by the 1x peers and dropped by both of its neighbors. The unattended
consequence is that 1x(a) is no longer connected to 1x(b). If the mining
network is only connected to one of these partitioned networks, then it is
possible that the other will not hear of new blocks. The bitcoin nodes will
have a different view of the network simply because they are not connected to
each other. Worse there might be a few miners on the less hashrate side that
still move the network forward a few blocks. If this situation persists, e.g.
because network operators are asleep at the wheel, it could be exploited by
selectively connecting and broadcasting double-spends to the two networks.

To prevent this from happening the Bitcoin Core team added code to 0.15 and
higher that will per-emptively disconnect peers that advertise themselves as
Segwit2x. Therefore a 0.15 node will only connect to peers that will relay
good blocks from its perspective, and it is much less likely that such a
network partition would occur. As long as there exists some nodes that don't
auto-disconnect (e.g. old bitcoin nodes) then the Bitcoin Core 0.15+ and the
Segwit2x networks will remain connected until the fork occurs.

~~~
theprotocol
Thanks, that was very helpful. This issue did not occur to me.

------
lawn
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/](http://bitcointicker.co/bccnetworkstats/)

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

~~~
cesarb
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.

------
hans0l074
N00b/ELI5/Ask HN question : Where is all this money coming from?

~~~
rocqua
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.

------
richardw
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?

------
matthewbauer
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).

------
int_19h
So, is the combined price of BTC and BCH in circulation still more than BTC
alone before the fork?

~~~
wyldfire
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
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.

------
icedchai
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.)

------
rasmus1610
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

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

~~~
SilasX
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.

~~~
imnotatwork
I mean, the main proponents of BCH did not mine it themselves to keep the
difficulty down, it does not seem to have reached hashrate-price-difficulty
equilibrium yet.

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

