A long Bitcoin Cash WINTER has just begun

Rafael Badziag
Aug 22, 2017 · 3 min read

Today at 19:30 UTC, another difficulty adjustment on the Bitcoin Cash blockchain took place. The difficulty went up making it FOUR times as difficult for miners to mine Bitcoin Cash. This change ended the Bitcoin Cash summer in an instand, a period when it was more profitable to mine Bitcoin Cash than to mine Bitcoin.

Mining Difficulty / Source: fork.lol

It is now unprofitable to mine Bitcoin Cash. We are looking at a long period of Bitcoin Cash winter starting now.

Relative Hashing Power / Source: fork.lol

At the top, bitcoin Cash attracted 45% of all hashing power, versus 55% of Bitcoin. It was mined with over 80% strength compared to Bitcoin’s which is astounding. The miners have started moving back to Bitcoin. The block frequency dropped from a block every minute to one in half an hour already and it will drop even further.

Mining Speed / Source: fork.lol

If the true believers, who mine Bitcoin Cash despite its lack of profitability invest 6–8% of the Bitcoin’s hashing power, as we were observing previously, we will have a long Bitcoin Cash winter of up to 2 months before the next standard difficulty adjustment.

Two months is a long period in the crypto world. Many things can happen.

These two scenarios seem most probable:

  1. The Bitcoin Cash blockchain will be abandoned altogether following the prisoners dilemma. This will happen if the main supporters, who mined despite the lack of profitability in the last BCH winter, decided to cash out and don’t hold any more Bitcoin Cash. In this case there is nobody actually interested in mining it or at least interested to the degree that it would sacrify himself for the blockchain. Keep in mind that even if some of the supporters have cashed out and the supporting hash power has dropped to say 2%, this would mean an extremely long winter of 6 months, a time of hopeless plough with no guarantee of success. The opportunity costs would be gargantuan. It is a realistic scenario, that the blockchain stops.
  2. The other scenario is that we will see some typical Bitcoin Cash difficulty adjustments, when slow mining leads to difficulty dropping by 20% in each step. If the BCH community manages to agree to mine in the strategic way I described in one of my previous articles, this could reduce the difficulty in a few days to a level, where Bitcoin Cash again becomes more profitable to mine than Bitcoin. This would attract the miners again and the adjustment wouldn’t be as harsh as it was this time. A spike in price could possibly bring a double-summer, meaning that also after the next difficulty adjustment mining BCH would be more profitable than BTC. This could bring BCH its final breakthrough.

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Rafael Badziag

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I am entrepreneur, speaker, writer and angel investor based in Germany. Some people call me the Napoleon Hill of 21st century, others — the Billionaire Magnet

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