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The battle for control of Bitcoin Cash becomes expensive.
The fourth largest cryptocurrency has begun to attract the attention of the general public this week when two competing software development teams have failed to agree on the best way to put in day the code and ended up splitting the network. The battle was cited Wednesday for contributing to the biggest drop in eight months for Bitcoin, which separated from Bitcoin Cash last year.
Both factions are using more and more computational power to support their software version to win a race called Nakamoto Consensus, in which the one with the most IT support wins. According to BitMex Research, the groups, known as ABC and SV, are losing about $ 700,000 a day in expenses such as electricity to run mining platforms that compete for deals. According to Jimmy Song, a lead developer of Bitcoin, this represents another additional cost of $ 1 million a day.
Everyone is committed to continuing to win the so-called hash war, where "hash" refers to the computing power dedicated to this effort. Although ABC is currently in the lead, the Coin Dance tracker believes that the balance of power could still change.
"Imagine a takeover of a $ 100 billion company, which could be achieved by directing your resources," said Lex Sokolin, global director of fintech strategy at Autonomous Research in London. "The prestige, reputation and power that ensues responsible for the vision and all the features of the future of money."
The winner will be able to modify the software to his advantage, for example by determining how to extract the parts more efficiently. Among the other benefits, there is the opportunity to attract better developers and more minors to join his pool. Whoever gains control will also have a great influence on the price of the part concerned.
"You can increase the price, you can reduce the price, you can increase the hash rate in one way or another," said Travis Kling, founder of the Ikigai hedge fund. The coins, Bitcoin Cash ABC and Bitcoin Cash SV, total well less than what Bitcoin Cash was worth before the range, according to data exchange Poloniex. When Bitcoin Cash was separated from Bitcoin in August 2017, investors actually saw the prices of both coins appreciate.
The ABC faction is led by the Chinese crypto-extraction giant Bitmain and investor Roger Ver, nicknamed Bitcoin Jesus for his early advocacy for the original piece. The SV Group, or Satoshi's Vision, is led by billionaire Calvin Ayre and Craig Wright, self-proclaimed Satoshi Nakamoto, anonymous creator of Bitcoin. Wright's claim has long been questioned in the cryptographic community.
In the meantime, the fight has been costly for investors, who have already seen Bitcoin Cash lose a market value of $ 2.75 billion last week.
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