How to Buy ZEC: The Full Guide to Zcash

How to Buy Zcash (ZEC) – A Beginners Guide

The first step in the Zcash journey for investors will be deciding upon which wallet to use to store the Zcash coins. Investors have the choice of downloading the official Zcash client wallet or selecting one of the 3rd party wallets available.

Step 1 – Create a Zcash Wallet

The official Zcash client wallet was initially developed for Linux, with the wallet now also compatible with Windows and MacOSX thanks to the Zcash community. Therefore, we recommend this wallet as it is compatible with Zcash features.

Third party wallets are few and far between, with most wallet providers unable to cater for the privacy component of the Zcash protocol.

As is the case with other cryptocurrencies, hot and cold wallets are available, which comprise of internet wallets, hardware wallets, local wallets and exchange wallets.

Internet Wallets: Internet wallets can be downloaded for desktops and mobile phones and it’s important to use particularly strong passwords and it is also encouraged to enable 2-factor authentication where possible.

Web-based wallets that are compatible with Zcash Transparent addresses include:

Coinspot; Jaxx; Freewallet; waterhole.io; coinBR.net; HolyTransaction; Bitpie and Coinomi.

For those looking for the greatest degree of anonymity, Jaxx; ZCash Swing GUI Wallet, Agama, and ZCash Cockpit UI Wallet are recommended, while Coinomi caters for the greatest variety of cryptocurrencies.

Hardware Wallets: Hardware wallets are considered to be the safest way to store Zcash coins, though at present they only support Zcash transparent addresses and are on the expensive side, which some will consider acceptable when considering its recovery capabilities in event of coin loss.

Hardware wallets include TREZOR and Ledger.

Local Wallets: While local wallets are considered to be on the more technical side for use, they support Zcash’s private addresses and have been developed by Zcash and the Zcash community. It is important to frequently backup the wallet

Finally, exchange wallets are also available, though none support Zcash privacy characteristics and should also be the choice of last resort, particularly when considering the issues faced with exchange wallets and the risk of being hacked.

Step 2 – Buy Zcash (ZEC)

Once the wallet has been created, there are two ways in which ZEC coins can be purchased. The first option to buy Zcash (ZEC) would be with fiat currencies, the second option is obviously with Bitcoin or Ethereum.

Buying Zcash with Fiat Currencies

In the case a trader is not holding Bitcoin or Ethereum and wishes to buy Zcash with fiat currencies, there are some exchanges that provide the option to buy Zcash with USD or EUR.

HitBTC allows a trader to purchase Zcash (ZEC) with fiat currencies. Another exchange that provides Zcash with USD is CEX.IO.

Buying Zcash with Bitcoin or Ethereum

The other option to buy Zcash ( ZEC) is with Bitcoin or Ethereum. If you already hold Bitcoin or Ethereum, you can move forward to the next step.

There are many exchanges that provide Bitcoin or Ethereum for fiat currencies. Coinbase is a popular exchange that allows traders to purchase Bitcoin or Ethereum with US dollar.

After using the link to go to Coinbase, select “Sign up” and enter your personal information. Coinbase treats client identification very seriously, so be sure to verify your account by supplying a phone number, uploading an image of your photo ID and verifying a credit/debit card or bank account.

After completing these steps, select “Buy/Sell” at the top menu.  Select “Bitcoin” and enter either the number of coins or the amount you want to spend. Bitcoin can be purchased in fractional units and the system will do the math for set amounts of local currency. Verify the information you have entered and “Buy”, and then “Confirm buy.”

If you are located in a country that Coinbase services are not available, you can purchase Bitcoin in other exchanges such as CEX.IO or Coinmama.

Step 3 – Exchange Bitcoin or Ethereum for Zcash (ZEC)

Now go to an exchange such as Binance or HitBTC to exchange your Ethereum or Bitcoin for ZEC.

First, enter the exchange and open an account, verify the account in the email you received. Then, you need to fund your account with BTC or ETH that you have purchased before at one of the exchanges above. In order to do that, click the “Funds” tab and search for BTC or ETH, choose “deposit”, copy the BTC or ETH deposit address and paste it to the exchange that you withdraw the money from. The process might take up to one hour (vary according to different exchanges).

Now, after completing these steps, you have Bitcoin or Ethereum in your HitBTC or Binance account. Click the “exchanges” and search for ZEC/BTC or ZEC/ETH, enter the amount and click “Buy ZEC”.


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What is Zcash?

Zcash utilizes cryptography to deliver a significantly greater degree of privacy than its peers, with the evolution of Zcash starting from Zerocoin protocol that had been code adjusted into Zerocash before the ultimate release of Zcash in 2016.

While Zcash payments are published on a public blockchain, the sender, recipient and amount of a transaction are kept private. The privacy functionality on the blockchain is an optional one, where the user has the choice of taking the privacy option.

ZCash is based on peer-reviewed cryptographic research, built by a security-specialized engineering team on an open source platform that is based on Bitcoin Core’s codebase. Privacy is considered to be the key enhancement over Bitcoin, with zero-knowledge proof cryptographic techniques being used to guarantee the validity of transactions, whilst maintaining privacy.

Zcash Technology

ZCash encrypts the contents of transactions that have been selected to remain private and, because payment information is also encrypted, the protocol uses cryptography to verify the validity of transactions.

In the case of Zcash, a zero-knowledge proof construction called zk-SNARK is used that was developed by the Zcash team. The construction enables the network to maintain a secure ledger of balances without disclosing the parties or amounts involved, with the zk-SNARK protocol proving that there is no fraud or theft.

The basic concept is not too dissimilar to Bitcoin, where Zcash facilitates public payments, the only difference being that Zcash payments remitted from a transparent address to a shielded one protect the remittance amount. The option is also available from shielded to transparent, where the remittance amount is unprotected and from transparent to transparent addresses that will have information fully disclosed.

As at the end of 2017, only 4% of Zcash coins fell within the shielded segment, though the number is expected to increase as a greater number of wallets are developed to support Zcash coins.

As is the case with the likes of Bitcoin, Zcash has a fixed total supply of 21 million coins. Within the first 4-years, 20% of the coins generated will be distributed to investors, developers and a non-profit foundation.

Zcash went live in October 2016 and currently sits at $750, following a 149% rally since 1st December 2017, with Zcash having rallied 965% in the calendar year 2017.

How to Trade Zcash with CFD’s?

For those looking to trade Zcash, another method to gain from Zcash volatility is through CFDs.

A CFD is an instrument that closely tracks the movements of an underlying asset, in this case, Zcash, with traders using CFDs never actually owning the asset, but instead establishing a contract with a broker.

Leading brokers that offer a Zcash CFD trading platform includes IQoptions, which has a presence in 183 geographies, has monthly trading volumes of close to $11bn and accepts debit and credit card payments.

For traders looking for higher frequency trading of Zcash, there are many benefits of trading with CFDs that include:

  • The ability to go either long or short to take advantage of the dips as well as the rallies.
  • Trade across a wider range of pairings to take advantage of the volatility seen on both sides of the trade pairs.
  • Take advantage of margin financing platforms that limit initial capital outlays, whilst taking on leverage to enhance returns.

For traders looking to increase exposure to the volatility that persists across the cryptocurrencies, some caution is needed with the inclusion of stop-loss limits advisable to avoid significant losses, particularly when leverage is included that could result in losses that may exceed initial investment sizes. Leverage on offer can be as great as 50x, with traders required to fund margin calls in the event of trades going the wrong way.

Zcash Futures

In addition to trading CFDs, Zcash futures trading is also an option available to traders, offering Zcash futures in BitMEX.

CFDs and futures contracts are both geared derivative contracts, the key difference being that a futures contract is an agreement to buy or sell the asset at a set price on a specific date in the future.

CFDs have no set future price or date and behave more closely with holding the actual asset from a trading perspective, with the buy or sell price not reflective of market sentiment towards the asset class on the settlement date, as is the case with futures contracts.

That said, interest charged on leverage in a CFD trade is daily, while baked into the asset price in a futures contract. From a traders’ perspective, CFDs do tend to be the preferred choice, with CFDs considered to have greater flexibility.

The Unique Mining Model of Zcash

Mining provides an alternative source of Zcash coins, which is an option for those willing to provide support to the Zcash network from home and interested in building a mining rig.

While it has been possible to mine for Zcash using computer processors (CPUs), there have been significant advancements in both hardware and software, which has left CPU miners with very low returns, as miners with computers built with one or several graphics cards (GPUs) taking over much of the hashrates.

The good news for miners with GPU mining equipment is that they will also be able to mine for other cryptocurrencies including Ethereum, but not Bitcoin that has progressed to ASICs mining rigs.

Once a miner has selected the GPU hardware to build the GPU rig, the next step is to select the most appropriate software.

While the Zcash team have developed software to support mining with CPU rigs, miners will need to look elsewhere for software that supports GPU mining rigs.

GPU software for mining includes, but are not limited to Optimizer, Claymore, NEHQ and Nicehash EQM, with some research needed to understand the best software – GPU hard combinations.

Once the hardware-software combination has been decided, assuming that the miner is not looking to build a mining warehouse, a mining pool will need to be chosen.

Mining pools provide individual miners an opportunity to link up with other smaller miners and then share the rewards based on individual hashrate contributions.

The downside to joining a mining pool include fees charged by the pool, which not only cover server costs but also fund the pool organizers who are looking to make a profit. It’s strongly advised for those looking to join a mining pool that they identify a reputable pool that is known for its honesty and does not have any reputational issues stemming from previous members of the pool not receiving fees earned.

Zcash mining pools include, but are not limited to Zcash4U; MININGSPEED; Coinotron; Dwarfpool; MinerGate and Zpool.guru amongst others.

Key details for interested miners include:

  • The total number of Zcash coins is limited to 21 million. The Zcash team are unable to estimate how long it will take for the 21 million coins to be mined, with technological advancements and the increased difficulty in the verification process an unknown.
  • For Zcash, the Proof-of-work algorithm is Equihash, which is resistant to specialized mining hardware such as ASICS that are used to mine Bitcoin.
  • Block Rewards: A total of 50 Zcash coins will be issued every 10 minutes, with 10% of coins mined being distributed to the Founders Reward.
  • Block Reward Halving: The Block Reward will halve every 4-years, as is the case with Bitcoin.
  • Founders Reward: The Founders Reward was established to fund the developers for building Zcash and to meet ongoing development costs. For the first 4-years, miners will receive 80% of the block rewards, with 20% going to the Zcash team. After the first 4-years, 100% of block rewards will then go to the miners, with miners receiving 100% of transaction fees from launch.

The Benefits and Risks of Zcash

While ZCash and its ability to provide a private transaction environment have been an attractive proposition for investors, the cryptomarket is changing and more and more exchanges are calling for disclosure of identification.

Much of this has stemmed from regulatory pressure, with governments and central banks imposing rules on exchanges relating to money laundering and “know your customer,” with exchanges being threatened with closure if they fail to meet the ever-changing regulatory landscape.

Other concerns over the near-term include the fact that many wallets that support Zcash do not cater for the privacy component of Zcash’s blockchain, which is certainly a negative for Zcash and acceptance of its cryptocurrency has an alternative to Bitcoin. Added to this is the fact that vendors are also keen to know with whom they are dealing, the anonymity raising some concerns.

On the upside, however, is the fact that the cryptomarket landscape is ever changing. The security strength supports the view that Zcash can survive and break through current barriers, though it may take some time.

As with any cryptocurrency, success will ultimately come down to whether there are prospects of the currency being accepted in the mainstream. For now, the list is small and how that list grows will be key to Zcash’s success.

How to Buy QTUM: The Ultimate Guide

QTUM: Best of the Best

There is a memorable scene in the classic 1966 western The Good, the Bad and the Ugly in which the character Tuco assembles a revolver from parts of the best guns available. Anyone who wants to understand QTUM (pronounced “quantum”) should keep this scene in mind. The team at QTUM is taking the same approach to building what they hope to be the definitive blockchain for business applications.

However, just as a gunsmith has a better understanding of what Tuco is doing than the average moviegoer, evaluating the approach QTUM has adopted requires an understanding of the parts they are putting together. This involves some complicated concepts, such as traditional Byzantine fault tolerance research, but the learning curve is not so steep that it is insurmountable.

How to Buy QTUM?

To buy QTUM it will be necessary to establish a QTUM wallet that will hold the cryptocurrency, and to create an account at a cryptocurrency exchange. Once these two accounts are established, the basic process is to buy or transfer Bitcoin or Ethereum (preferably ETH as it decreases the time of transfer and the cost of fees) to the exchange, exchange the Bitcoin or Ethereum for QTUM, and then transfer the QTUM cryptocurrency back to the new wallet.

Step 1 – Create a QTUM Wallet

Download the wallet by selecting the type of wallet that works on your computer (Linux, Windows or Mac) under the section labeled “Quickstart”. There is an extensive line of wallets, and some computer proficiency is necessary to select one. This poor interface is a characteristic of QTUM and one of the problems management needs to solve.

After the download is complete, unzip the file and find the folder named “Bin”.  In this folder is a file named “qtum-qt”. Open this file to install the wallet. It will need internet access and will pop up a box on the status of the download and installation.

Once the download is complete choose “Settings” and “Encrypt Wallet”. Choose a difficult but memorable passphrase. Press “OK” and read the warning that appears, and then press “Yes”. The program will encrypt your wallet and close.

Reopen your wallet and select “File” and “Backup Wallet”. Give the file a memorable name, and save it onto a secure device like a USB or cryptocurrency stick.  After saving a copy, select “Receive” and “Request Payment”. Copy down the long list of letters and numbers correctly.

Step 2 – Purchase Bitcoin or Ethereum

You now need to buy some Bitcoin/Ethereum to exchange for QTUM. At the time of this writing, no exchange supports buying QTUM for national fiat currency, but the market is extremely fluid, and this may have changed. If so, it will still be necessary to establish an account at that exchange.

There are many exchanges that allow the purchase of Bitcoin/Ethereum for national currencies. They offer a variety of features, including ease of use and security. In addition, the cost of purchasing Bitcoin/Ethereum changes frequently, so it is impossible to identify a “best” option for this step. Coinbase is a popular option, and this guide will describe the process of creating an account to purchase Bitcoin. If you already own Bitcoin or Ethereum, this step is unnecessary. You can move forward to the next section.

After using the link to go to Coinbase, select “Sign up” and enter your personal information. Coinbase treats client identification very seriously, so be sure to verify your account by supplying a phone number, uploading an image of your photo ID and verifying a credit/debit card or bank account.

After completing these steps, select “Buy/Sell” at the top menu.  Select “Bitcoin” and enter either the number of coins or the amount you want to spend.  Bitcoin can be purchased in fractional units and the system will do the math for set amounts of local currency.  Verify the information you have entered and “Buy”, and then “Confirm buy.”

If you are located in a country that Coinbase services are not available, you can purchase Bitcoin in other exchanges such as CEX.IO or Coinmama.

Step 3 – Exchange Bitcoin for QTUM

Now go to an exchange such as Binance to exchange your Bitcoin for QTUM.

First, enter Binance and open an account, verify the account in the email you received. Then, you need to fund your account with BTC or ETH that you have purchased before at one of the exchanges above. In order to do that, click the “Funds” tab and search for BTC or ETH, choose “deposit”, copy the BTC or ETH deposit address and paste it to the exchange that you withdraw the money from. The process might take up to one hour (vary according to different exchanges).

Now, after completing these steps, you have Bitcoin or Ethereum in your Binance account. Click the “exchanges” and search for QTUM/BTC, enter the amount and click “Buy QTUM”.

 


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Blockchain Basics

It helps to start with the basics because everything that QTUM hopes to accomplish address core issues of blockchain technology. Blockchain stores information on identical copies of a ledger stored on different computers that are connected through the Internet. Sophisticated systems check each new entry against the existing copies to make sure the new entry is correct before adding it to the chain.

There are two basic methods to check the existing copies. They are called Proof of Work (PoW) and Proof of Stake (PoS). Each has its advantages and shortcomings.  PoW was used initially because it allows anyone with a computer to participate in the blockchain. One problem with PoW is that it requires a significant amount of electricity to run the blockchain because powerful computers have to do complicated math.

Proof of Stake (PoS) overcomes this by allowing anyone with a financial stake in the accuracy of the calculation – commonly called ‘skin in the game’ – to participate in the verification process. This avoids the complicated math, but effectively allows participants to “buy votes.” A blockchain participant who has more money committed to the system has more votes in the verification process.  This is fundamentally undemocratic and a problem for some blockchain advocates.

Because blockchain was initially envisioned as a way to move away from centralized control of the monetary system, PoW was used as the method of choosing those who would be allowed to validate the blockchain. Bitcoin and Ethereum use PoW, but the energy demands and other drawbacks make this approach difficult to continue.

QTUM – Choices, Choices, and More Choices

QTUM takes a very practical view of these matters. Their goal is to bring the potential financial benefits of blockchain technology into the real world of operating businesses. So, in deciding between PoW and PoS, they simply asked their target users – business owners and operators – which they preferred.  The clear answer was the PoS approach.

Ethereum has made this same transition with the introduction of the Casper protocol. QTUM obviously believes that this is the right choice, but feels that the Ethereum blockchain still has fundamental disadvantages to the Bitcoin blockchain. However, the management team feels that certain features of Ethereum smart contracts are vastly superior to those available on the Bitcoin blockchain.

So, like the character in the movie, QTUM’s solution is to fit together the parts they like from each of the two blockchains. However, unlike the parts of different guns, parts of these two blockchains do not fit together at all. In fact, the Bitcoin and Ethereum blockchains use two different methods of actually processing a transaction. Bitcoin uses a complex methodology called unspent transaction outputs (“UTXOs”), while Ethereum uses the simple concept of account balances.

Like PoW and PoS, there are both practical and philosophical differences between these approaches. Each has its benefits and each has its shortcomings.  The simple fact is that the two approaches are not compatible. The situation can be compared to a gasoline and a diesel engine. You cannot expect one type of engine to run on the other type of fuel.

Rather than the start of scratch with a new blockchain environment – an approach some competitors have taken – QTUM set out to engineer a solution. They have built a bridge called Account Abstraction Layer which exists on the Bitcoin blockchain but which operates in the Ethereum environment. This innovative solution is one of the core value propositions of QTUM. If it works and is accepted in the marketplace it will prove to be a key element in QTUM’s success.

Quantum Coin – Built for Business

QTUM’s success will be determined by business users. While there has been a great deal of analysis and speculation on the value of blockchain for business, the actual applications are few and far between. QTUM looks to change that by making blockchain accessible. This is why they met with operating businesses to decide the PoW / PoS issue.

However, meeting the needs of the business community is a tall order, particularly when the goal is to develop a broad-based platform rather than something tailored for a particular need or industry like Ripple. One of the problems that have to be addressed is the amount of information stored on existing systems.

This problem can’t be overstated. Computer programmers have a joke that asks how God could create the universe in 6 days. The answer is that “He started from scratch and did not have to deal with an existing user base.” The ubiquitous use of the “QWERTY” keyboard in spite of its obsolesce is a great example of this problem.

QTUM is addressing this problem with another software bridge. In this case, it is between the smart contracts and existing legacy data systems. The team refers to these as “oracles”. They can be considered a type of Application Programming Interface (API) which provides the business with the tools needed to customize their own connection to existing data systems.

QTUM oracles are intended to power the smart contracts built in the Ethereum environment. Smart contracts are self-executing arrangements, and any degree of automation that can be applied to them will undoubtedly provide significant cost savings and gain market acceptance. It is fair to say that this is one of the most potentially lucrative aspects of blockchain technology for businesses.

It makes sense to think of oracles as putting together parts of two different guns – data from old systems feeding into smart contracts on the blockchain. The same is true for QTUM’s focus on building out blockchain use for mobile devices.  Business has incorporated the use of smartphones into Standard Operating Procedure (SOP) and QTUM is very focused on bringing the power of smart contracts to those devices.

QTUM Strengths

The development team at QTUM is made up of individuals with impressive backgrounds in a wide variety of fields, as befits a company that is attempting to blend elements of different blockchains. They also benefit from capital supplied by angel investors with similarly confidence-inspiring resumes.

There is little doubt that QTUM knows the technology behind what they are trying to accomplish, and has taken a thoughtful, considered approach to bringing the core value of blockchain to a wide businesses audience. The idea of using proven technology and fitting it together is a great example of the value that can come from such an approach.

QTUM Challenges

Of course, QTUM is not the only blockchain developer trying to enter the business mainstream, and it is uncertain how many providers can find a seat at this table.  QTUM is a late entrant and may need to produce results fairly quickly in order to win business users. Getting computer programmers to develop the customize oracles that allow efficient use of smart contracts is a large hurdle the company has to overcome.

In addition, there is a strange, tone-deaf quality to QTUM’s public face on its website. English words break inappropriately, ignoring the rules of spelling and making the entire website very difficult to read. Although poor English grammar is a hallmark of the cryptocurrency sector, QTUM’s website takes this to another level. In the business world where “perception is reality”, this odd quirk may create a perception of incompetence.

Conclusion

QTUM is a relatively young entrant into an increasingly crowded field. They have an intelligent approach to problem-solving that should appeal to their target end-user. The unknown issue is if that business will invest in this blockchain solution or some other provider who comes close to meeting their core criteria of usability and reliability.

Why Bitcoin Cash is Better than Bitcoin

Bitcoin experienced its first hard fork during the summer. The hard fork was as a result of a disagreement between Bitcoin’s core developers and miners. The dispute continues and is ultimately an attempt by Bitcoin’s mining cartel to hold on to all of the hashpower for Bitcoin mining, while the core developers are looking to decentralize away from the mining cartel.

The entire ethos of Bitcoin is for decentralization. The removal of a centralized control over Bitcoin’s future has been what many within the Bitcoin community have called for. Bitcoin may have removed control away from governments and central banks, but as Bitcoin evolved, the capabilities of miners have also advanced and with it has a new battle has born, control over the mining of Bitcoin.

Things have become more complicated since the cancellation of the SegWit2X hard fork that was scheduled for this month. The Bitcoin world has been left with the choice of three as a result of the fork cancellation. The original Bitcoin and Bitcoin’s offshoots, Bitcoin Cash and Bitcoin Gold that have come about from the much talked about hard forks.

Bitcoin Gold supports the desire to prize away from the hashpower monopoly held by the Bitcoin mining cartel. Following Bitcoin gold’s collapse in recent days, however, it’s clear that the cryptoworld and Bitcoin’s world, in particular, has decided which are to face off against each other. It’s now down to Bitcoin Cash to fight off Bitcoin’s superiority over the cryptoworld.

Bitcoin VS Bitcoin Cash: It’s a Mining Competition

The Bitcoin civil war has now truly started and the choppiness in the pair’s prices is a clear indication of how the Bitcoin world has been repositioning in recent days.

We saw Bitcoin Cash surge to a record high over the weekend, touching a high $2,799 before the great retreat. On the day, Bitcoin Cash not only moved above Ethereum into second place by the market cap, but Bitcoin Cash also saw more hashpower than Bitcoin.

It’s quite a monumental shift considering the fact that Bitcoin’s hashpower was estimated at more than 5 times that of Bitcoin Cash before news hit of the cancellation of SegWit2X.

So, what’s the difference between Bitcoin and Bitcoin Cash and why is there so much focus on Bitcoin’s first offshoot?

To fully understand, it’s important to recognize the rationale for the Bitcoin Cash fork back in August of this year.

It has ultimately been down to capacity issues, with Bitcoin transaction times having slowed for as long as 10 minutes. How to address capacity has been a battle between the miners and the core developers. The miners looking for both an increase in blockchain capacity as well as transaction timesץ For the core developers, the desire is to make the necessary improvements to Bitcoin, whilst looking to remove the concentration of the hashpower that sits with a handful of miners.

With neither side willing to concede, Bitcoin Cash was created through the hard fork. The weekend surge in Bitcoin Cash price and the increase of the hashpower came as mining for Bitcoin Cash became more profitable, the faster transaction times being the key. On Saturday, it was reportedly 69.4% more profitable to mine for Bitcoin Cash than for Bitcoin and miners are ultimately only interested in one thing…

The shift in hashpower and miner preference for Bitcoin Cash came as a result of the price spikes seen in Bitcoin’s offshoot. Ultimately, those favoring Bitcoin cash are in favor of a payment-efficient Bitcoin version over the master cryptocurrency Bitcoin, but not the miners.

The Sunday spike was as a result of particularly high trading volumes on one of South Korea’s largest exchanges, Bithumb.

Since the Sunday anomaly, Bitcoin’s hashrate superiority has returned and as at the time of writing, Bitcoin’s price has managed to recover to $7435 at the expense of Bitcoin Cash, which has fallen further back to $1,050 from Sunday’s $2,799.

Bitcoin’s superior hashrate and price recovery suggest that the market has decided to stick with the original Bitcoin and shift away from the hard forked alternative.

From a mining perspective, the chicken and egg question in the cryptoworld is whether hashrate rises are followed by price gains, or whether price gains are followed by hashrate rises.

If we look at the events over the weekend, there was a material shift in hashrates for Bitcoin Cash that resulted from a price spike. As a result of the price spike, Bitcoin’s price suffered and mining became less profitable, leading to smaller miners either turning off their mining operations or mining Bitcoin Cash.

Miners are unlikely to stop mining a particular cryptocurrency, if there is no decline in price or more profitable alternatives. The latest prices moves have ultimately led to a recovery in Bitcoin’s hashrate. At the time of writing, Bitcoin’s hashrate stood at 9.2459E compared with Bitcoin Cash’s 1.4632E, making Bitcoin’s hashrate more than 6 times that of Bitcoin Cash. This is in stark contrast to November 12th, where Bitcoin Cash’s hashrate stood at 5.825E, compared with Bitcoin’s 4.8777E.

Bitcoin/Bitcoin Cash Hashrate
Bitcoin/Bitcoin Cash Hashrate

The chart below shows the hashrates for the pair over the last 3-months, and it’s worth noting that the November 12th shift was the 2nd occasion that Bitcoin Cash saw higher hashrates since its existence.

Assuming Bitcoin Cash does not experience a similar fate as Bitcoin Gold, we can expect miners to shift between the two. Bitcoin is unlikely to go anywhere anytime soon, with Bitcoin likely to find plenty of support on the dips. Price recoveries would then see miners return to Bitcoin, assuming the Bitcoin Cash had reaped the benefits of Bitcoin’s demise.

Bitcoin Cash may have the larger block size that allows faster transaction times, but it will always boil down to profitability. It’s a money game after all and with miners having invested significant capital into mining centers, they’re unlikely to be particularly interested in their true beliefs on decentralization and how Bitcoin should evolve. The ability to anticipate price moves between the two will be key to miner profitability and the more successful miners will likely be more focused on what to mine and when rather than why.