Hash Wars III: clones clone – yet another fork of Bitcoin Cash (BCH)

Almost one fork per year – After the fork between Bitcoin (BTC) and Bitcoin Cash (BCH) in August 2017, then the fork between BCH and Craig Wright’s BSV in November 2018, it is a third “hash war” which looms this November 15. A deep disagreement within the BCH community will cause a further split into two distinct blockchains.

We no longer stop the cloning of BCH: here we are now BCHA and BCHN

The communities in the Bitcoin Cash project seem to agree to disagree. The bone of contention is the implementation of an 8% tax on mined block rewards .

This implementation, scheduled for the fork of November 15, has been very strongly criticized from its first evocations at the beginning of 2020. Although the controversial tax has since been reduced (from 12.5 to 8%), nothing is there. fact: some miners and nodes in the network will refuse this forced taxation.

The two clans are divided as follows.

On the one hand, there is the clan gathered around Wealth Matrix, whose crypto will be called „BCHA“ . This camp will implement the famous tax, which aims to help the development of the BCH network (well BCHA, we must manage to follow!).

On the other hand, there is the “BCHN” (Bitcoin Cash Node) tribe , led by Roger Ver . They refuse taxation, criticizing in particular the fact that all the withdrawals will go to a portfolio controlled by Amaury Séchet .

Emergency plans created in panic by crypto platforms

The CoinDance site allows you to list by which node software client the last 1,000 blocks on the BCH network were validated . The least that can be said is that taxation is not on the rise at all.

As can be seen below, 767 of the last 1000 blocks ( more than three-quarters therefore) were mined by nodes with the tax-free implementation of BCHN . Only 8 blocks (or 0.8%) validated a block with the client version of Bitcoin ABC . However, it should be noted that 22.5% of “neutral” nodes have still not chosen their camp.

Breakdown of customer types who have validated the last 1,000 blocks of the Bitcoin Cash network
As we can see on the Bitcoin.com site , the exchange platforms and the various crypto services are a little overwhelmed by so much separatist violence .

Realizing the big problem on the way, crypto exchanges Binance and Huobi, for example, have just announced that they will stop a certain number of services relating to BCH during this stormy transition phase of the hard fork . Binance will more precisely stop these BCH futures contracts in prevention, from this November 9.

On the side of Coinbase and BitGo , the decision is made: the two companies will only keep BCHN type nodes , and will no longer support BCHA after the November 15 fork.

Even if this umpteenth schism now seems inevitable within 10 days of the hard fork , the BCHA clan seems reduced to grief. The latest snub to the minors‘ tax camp would be that BCHN ultimately retains the title of BCH, experiencing the same fate of “forced renaming” of BSV.

How crypt currency wallets earn

Crypt currency wallets are the starting and ending point of any transaction in the world of digital currencies – banks and other intermediaries are simply absent here. However, most of them are free. Let’s take a look at the sources of their profits.

First of all, a few words should be said about the crypto wallets themselves: usually free programs or mobile applications that allow you to work with crypto wallets – store, send, receive and manage public/private keys. On the whole, they all look quite primitive, but some are quite popular and even earn serious money. How is this possible?

Wallets do not make a profit from transactions

There is a misconception that crypt currency wallets earn by withholding commission from transactions. This has taken root because some exchanges (wrongly considered wallets) charge decent withdrawal fees (and sometimes deposit fees). We, who have learned from our bitter experience with the classical financial system, believe that any intermediary involved in a transaction is bound to receive its share.

The fees charged by wallets are in fact fees for the services of miners registering the transaction in the register. Wallets have nothing to do with mining (although they may act as a separate, fully fledged unit involved in the transaction). Here is a description of this process from Coinbase:

„In general, Coinbase does not charge a fee for using the digital wallets service. Transferring virtual currency to the Coinbase platform address may result in a network fee (e.g. bitcoin miner fees) that the user has to pay. All fees will be communicated to the user before the transaction“.

But there are also exceptions. Bitgo, a multi-signature wallet, charges 0.25% of all inbound and outbound payments in exchange for secure storage in the interest of business. Bitgo is intended for large companies that need trusted storage of digital assets, not for individuals.

This is their core business model (at least for the time being). With a large number of users and a wide range of applications, wallets earn good partner rewards from third-party services.

The most popular is the ability to instantly exchange crypts via Shapeshift or Changelly services. The latter have a very generous partnership programme, as rates are usually much higher than market rates. Customers pay for convenience, and purse developers are rewarded by the service provider.

Finally, some wallets allow you to buy digital assets directly from your credit card. The services are provided in cooperation with companies such as Simplex. Simplex pays the developers remuneration from each transaction.

Users pay for convenience, while rewarding the creators of wallets. In addition, wallets generate traffic on exchanges ready to pay high fees for new customers. Everyone has partnership programmes. Even hardware wallets (which cannot be called free) often participate in such events. Finally, some of the software wallets, such as mycrypto, earn money by offering users hardware wallets.

The financial performance of wallet-developing companies is usually unknown, but it is safe to say that 90% of their revenue comes from one or more of the sources listed above.

The main problem with hardware wallets

Hardware wallets (or „cold storage“) usually have a fairly simple business model: they are paid for by the customer. Prices range from $50 to $300. Production of the wallets themselves is inexpensive (around $20), so the profitability of such projects is incredibly high, which allows for generous partner programmes (for example, Trezor offers a cacheback of 10%).

True, this model has one drawback: one-time shopping. The average customer is not tempted to change his wallet every year for a new one (unlike a smartphone). He buys a wallet (and a second one for the reserve), and his interest ends there. In theory, purse manufacturers can no longer offer him anything new.

Developers are well aware of this and embed links to all kinds of services into the software or try to enter new promising markets (like depository storage).

Hybrid wallets/exchanges

Some wallets allow you to buy cryptov currencies, but unlike integration with a third party, they work directly with the exchange. For example, Xapo or Blockchain.info (probably the largest crypto wallet at the moment) allow you to buy bitcoins and ether. They charge trading fees and sometimes earn money by converting ordinary currencies.

Some projects are completely selfless

Many of the crypt currency wallets are open source projects that are not aimed at making a profit. However, their freeware usually has an impact on usability.

Other projects (e.g. Ethos) do not need to take care of profits because they raised a huge amount of money during the IPO and monetising the service is not a priority for them.

Finally, some wallets are free as they are controlled by companies earning money from other services and wallets are a business cost for them. This applies, for example, to the Trust Wallet. The wallet was purchased by Binance, so it is completely free (and will probably remain so).

New boundaries

Wallets thus depend either on the revenue from partner programmes or on one-time user purchases. Partner programmes can hardly be called a reliable basis for long-term growth: nobody knows when they will be cancelled.

Is there a sustainable development path for crypto wallets? It is still difficult to answer this question.

In the end, each consumer will have their own wallet, like a smartphone or TV. These projects will occupy a significant niche in the industry – the same niche as browsers or email clients on the internet. At the same time, partner programmes or even purchase/sale transactions are unlikely to be the basis for compensation for operating expenses (quite significant). In the future, new items of income will appear which will support the development of crypt currency wallets. It is difficult to say exactly what they will be like. It is likely that profits will be linked to the work of consensus protocols and incentives paid to node operators.

There may also be additional revenues in the form of direct or indirect user payments, as we are all used to paying for software and services. The existence of many non-game paid mobile applications suggests that this idea is quite feasible. New banking service models such as N26 or Revolut show that people are willing to pay for services that are worth it. Similarly, they will pay for decent and comfortable crypto wallets.

Today, the industry is bound by all kinds of partnership programmes in anticipation of better times. Hardware wallets promote exchanges. They cooperate in software wallets, which in turn promote exchanges and hardware wallets.

Of course, the industry has to develop, but this process will only take place once fresh money is available, new rules are introduced and the cryptocurrency economy has moved to the next level. Crypt wallets are still in their infancy, being the fundamental basis of crypto-economics.

Investment Guru Balaji Srinivasan avdekker kryptostrategi for nybegynnere, høydepunkter flere prosjekter utover Bitcoin

Engelinvestor Balaji Srinivasan deler en krypto-investeringsstrategi som nybegynnere kan bruke til å bygge sin portefølje.

I et intervju på Real Vision Finance sier den tidligere Coinbase CTO at den beste måten å lære å investere i krypto er å komme i gang med Bitcoin.

„Hvis du ikke vet hva du gjør i rommet ennå, kjøp BTC og lær. De fleste mennesker vil kjøpe BTC på Coinbase. Så får de en lommebok, de leker med den for å fordype seg i samfunnet, de vil utvikle sine egne teser om den. „

Srinivasan forklarer hvorfor han refererer til Bitcoin Billionaire som lingua of the crypto Babel.

“Alle, uansett kryptosubkultur, kjenner og respekterer BTC. Hvis du er Ethereum eller er i EOS, eller du er i Zcash, eller du er i Cosmos eller hva som helst, er BTC bare en slags den universelle typen nevner. “

Srinivasan sier også at investorer ikke vil gå galt ved å ha kongemynten, men bemerker at det er andre viktige prosjekter å utforske.

“Hvis du vil gå lenger, avhenger det av oppgaven din og hvordan du utforsker rommet. Hvis du for eksempel er veldig interessert i personvern, er det interessant å se på Zcash. Hvis du er interessert i programbygging fra utviklerne – og ikke bare Zcash, men andre zkSNARKs-relaterte ting (null kunnskapssikkerhet), Grin … Noen fantastiske ting skjer der når det gjelder personvernbevarende beregninger – veldig viktig, ærlig talt , for hvor internett skal …

En annen vinkel, hvis du bryr deg om økonomi, er å komme inn i Ethereum og DeFi (desentralisert finansiering), hvor hvert eneste finansielle instrument blir gjenoppbygget i kjeden fra derivater til aksjer og obligasjoner og hva du har, og du kan i utgangspunktet sette opp en Bloomberg-terminal hvor som helst fra datamaskinen din uten en Bloomberg-terminalavgift.

Og det er sinnssykt verdifullt og interessant fordi det som kommer til å skje er, akkurat som Twitter, hvor mange mennesker som var journalister i 1995 mot å legge ut på nettet innen 2015? Det gikk fra noen få tusen mennesker til hundrevis av millioner mennesker som postet på nettet. På samme måte, hvis internett forvandlet verden til utgivere, vil crypto gjøre verden til investorer og finansfolk. Hvis du er interessert i det, er Ethereum og DeFi og alle de nye protokollene som er relatert til det interessante. . ”

På toppen av personvern og økonomi påpeker Srinivasan at investorer bør se på andre interessante sektorer som de kan investere i og legge til i kryptoporteføljen.

“Så hva slags teknologier jeg er interessert i er de som utfyller BTC der BTC er et digitalt gull. Jeg føler ikke at det er truet, men jeg tror vi også trenger et digitalt banksystem. Vi trenger private mynter. Jeg tror vi for eksempel trenger streaming av video og sensurerbare meldinger og alt dette annet, ikke sant? Og jeg tror at krypto vil være en massiv komponent av det, selv om det tar 5, 10, 15 år for det hele å bygge seg ut. „