The Liar, The Criminal and Jihan: A Tale of Bitcoin Cash

by CryptoCheets — on

As everybody knows, the cryptocurrency market is known to be very volatile. It's not uncommon for a coin's price to surge tens of percents over a period of days or even hours. However, something very characteristic happened this weekend: Bitcoin Cash (BCH) rose from a low of $650 to a high of $2400, with no news or evidence backing the rise. But, what could have caused it, then? There are two possible answers: a sudden market preference for BCH over BTC, or a Pump & Dump scheme of unreal magnitudes. Let's review the two possibilities, and who is behind them.

Was There a Sudden Preference For Bitcoin Cash (BCH)?

Bitcoin Cash is the resulting currency of the hard-forked bitcoin chain. In short, it offers 8MB flexible block-sizes and faster on-chain transactions. However, since the Bitcoin Cash fork, there has been a lot of controversy revolving around the centralization of power. As of now, the majority of all BCH is being mined by only a few mining pools. Thus, increasing the risk of a 51% attack (where a miner holding the majority of the network's hashrate could reverse bitcoin transactions and send them over again to his advantage).

In consequence, to attract more miners, the BCH network would need to have compelling incentives for BTC miners to switch their power to the new chain. One of the main reasons why a highly-valued Bitcoin Cash is attractive for miners and users is the higher block reward. In other words, a higher block reward would mean more miners and a less centralized system.

Furthermore, if the market saw a real chance of BCH becoming more profitable to mine than BTC, the anticipated rise to $2400 would have been funded. Bitcoin Cash, having numerous advantages over Bitcoin, could have gained a lot of attention from Bitcoin users tired of irrational transaction fees and network congestion. But was this really the case behind yesterday's sudden rise, or is this what someone would like us to believe?

Who Is Behind Bitcoin Cash?

An ex-convict, a delusional liar, and a Bitcoin manipulator - respectively Roger Ver, Craig Wright and Jihan Wu.

In 2002, Roger Ver was convicted of selling agricultural grade explosives on the online marketplace eBay. He pleaded guilty to all charges and served a 10-month sentence in a federal prison, plus three years of probation. Take note that he kept the explosives in an apartment building, thus endangering the unsuspicious neighbors.

Roger Ver also has no programming skills, yet he is one of the key leaders of the Bitcoin Cash developer team.

Craig Wright, on the other hand, claimed to be Satoshi Nakamoto. Obviously, he was unable to prove the authenticity of this claim by showing ownership of the genesis block coins. Here is Craig answering some reporter’s innocent questions.

Lastly, Jihan has been known to operate one of the biggest bitcoin mining pools Bitmain, which has also lately been a very enthusiastic supporter of the 2x fork (yes, the one that never happened). How did his mining pool play out to his advantage? By supporting his own bitcoin political faction.

Was a Pump Possible?

The three main actors mentioned above hold millions of dollars worth of Bitcoin (and Bitcoin Cash), all together. They could have easily used them to manipulate prices, and thus influence the future outcome their cryptocurrency.

A wallet that Ver used to vote on, transferred 25 000 BTC to BitFinex during the price surge. With what intent? We could only speculate at this point, but normally coins don't jump 300% in a matter of hours. In addition to that, considering the background of the BCH developer team a P&D scheme remains possible and even probable.

How will this influence the future of Bitcoin?

Nobody knows, but we can make guesses. An outright miner war could break-out between the two opposing factions with miners continually switching between the most profitable coins to mine. Another possibility could be one of the two bitcoins gaining a competitive advantage over the other and becoming the leading currency. Lastly, another cryptocurrency could dethrone Bitcoin and change the cryptocurrency world forever. After all, only the futures knows the outcome of these events.

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