Bitmex exchange’s research group has identified an interesting phenomenon on the Bitcoin Cash (BCH) chain. The chain hard forked for rule change purposes, but the orphaned chain is continuing to be mined.
The research does not indicate which group is mining the blocks, but four blocks have been confirmed on the now useless chain. With no transactions, the blocks are not generating any fees, and as the orphaned chain there is no block reward.The Bitcoin Cash chain split continues….
— BitMEX Research (@BitMEXResearch) November 15, 2019
The shorter original rules chain has been extended by one addiitonal blockhttps://t.co/U9hbK4peip pic.twitter.com/lynovM9oVb
Bitcoin ‘Crash’
While the orphaned chain continues to be mined, the miners are wasting resources on each new block mined. Further, with no block reward, the opportunity cost of not mining on the new rules chain is 12.5 BCH for each block lost. Bitcoin’s original programming allows for both hard and soft forks, and Bitcoin Cash as a hard fork of Bitcoin follows this same protocol. Hard forks are designed to create rule changes that are necessary on the chain, while soft forks allow democratic chain governance with miner majority.
The altcoin has had a rough year to date, after starting strong. The second quarter showed great support and stability, peaking in mid-June around $485. However, the third quarter saw BCH crashed over 30%, resulting in a low under $300.
The coin has continued to bleed value, as concerns about the overall market have remained. At the time of writing, the asset was trading near $260.
Roger, Roger
While the coin was billed as the solution to the scalability problem, its founder Roger Ver has been vilified recently as well. Many view Ver as a sort of usurper of the Bitcoin chain, causing more trouble than help, and leaving the Bitcoin market is chaos. The previous hardfork, conducted on May 15 of this year, left the chain with a mess. Prices had dropped after mistakes had been revealed. This led to some fear in the market and dramatically increased the volatility ahead of the November 15th hardfork.
While the market may take time to respond, the miners on the orphaned chain reveal the apparent disorganization on the BCH chain, in spite of the assurances of its creators. Whether Ver and others can correct the issue remains to be seen.
Images are courtesy of Shutterstock, Twitter.
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Jon Buck
With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.
With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.
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