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How the Bitcoin Cash (BCH) Hash War is Impacting the Broader Crypto Market

Nov 19, 2018

 

  • Leading up to a scheduled November 15th, 2018 hard fork on the Bitcoin Cash (BCH) network, two separate packages of upgrades gained traction among the BCH community: The Bitcoin ABC package included features like smart contract capabilities, Oracle services, and scaling improvements (that do not alter block sizes) while the Bitcoin SV package replaced pre-existing Bitcoin ABC protocols with its own and increased block sizes from 32MB to 128MB.
     
  • Both upgrade packages were implemented in the BCH Network on November 15th, resulting in a network split of the cryptocurrency market’s fourth-largest coin. 
     
  • Cryptocurrency exchanges began to offer listings of both variants of BCH immediately following the hard fork: The Bitcoin Cash ABC token trades under the ticker BCHABC while the Bitcoin Cash SV token trades under the ticker BCHSV.
     
  • Upon the split of the BCH Network, a hash war, or battle of mining power, between BCHABC and BCHSV miners ensued to establish the dominant network.
     
  • Roger Ver, the CEO of Bitcoin.com who has championed the BCHABC implementation, redirected Bitcoin.com hash power from Bitcoin (BTC) mining to BCHABC mining to bolster the forked network’s support. Jihan Wu, co-founder of Bitmain, also did the same with Bitmain’s mining force. 
     
  • Craig Wright, who has headed the BCHSV implementation, believes that temporary spikes in BCHABC mining activity will be futile, saying on Twitter, “Continuous competition until one dies as we do not stop,”. Other tweets on Wrights twitter indicate that he has no problem losing this short-term hash war between BCHABC and BCHSV, as he believes that the hash war will be long-term -- another tweet on Wright’s account reads, “Come on Roger, Keep burning -- we do not want to get ahead just yet.”
     
  • As seen in the chart below, BCHABC appears to be winning the hash war as it maintains a higher hash rate than that of the BCHSV Network -- currently, the BCHABC Network’s hash rate of 1,750,810EH is 39.39% higher than the BCHSV Network’s hash rate of 1,255,996EH.
     
  • Trading of each token across cryptocurrency exchanges appears to favor the BCHABC Network as well -- currently, BCHABC is trading at USD$227.39/token while BCHSV is trading at USD$76.81/token.
     
  • In terms of volume, however, BCHSV’s 24-hour volume of USD$89.6mm is far higher than BCHABC’s 24-hour volume of USD$57.5mm.
     
  • As the BCH Network hash war rages on, the broader cryptocurrency market will continue to be negatively impacted. Mining pools pulling hash power from BTC mining to contribute to forms of BCH mining will place further downward pressure on the price of BTC. The battle between both BCH networks is also exacerbating pre-existing investor concerns that surround cryptocurrency hard forks, working further to put downward pressure on the broader cryptocurrency market. Until the BCH hash war ends, largely negative sentiment will likely surround the cryptocurrency market, hindering any sort of upward price breakout.

 

Source: coin.dance