High Fees Is An Extinction Event

Make no mistake. The rats are scrambling off this BTC sinking ship. High Fees is an extinction event. Like all extinction events there is always a group of loutish and very vocal band of hard core deniers. Their arguments are hypocritical, and their reasoning always seem incomplete.

BTC dominance below 40%

Today BTC dominance dropped to 38.4%. Total Market Cap is still 600 billion. This means that value have flowed to other currencies this time to Ripple. Value flows to crypto through BTC because it is the main bridge with all fiat currencies.

This happened before when value flowed to Ethereum. That was stopped in its' track because Ethereum encountered several major problems. ( DAO, more hacks and scaling issues )

Will Ripple become the new No 1 crypto coin?

Possible but it will be temporary, until BCH takes over. This upsurge is a pump and FOMO event, timely as many investors are looking to exit BTC. The fact that bankers like it strengthens their believe that this could be a major crypto coin. Again do not be fooled. Ripple is nothing but a token. Issued by a central authority. 38 billion are in circulation and 62 billion is in reserve.

It is not a mineable coin ( POW or POS) It is just issued (printed) out of thin air. Its value is in saving banks and financial institutions billions in interbank transfer fees. For this system to work it needs a large market cap. It certainly has that now. Banking transfer systems like SWIFT will not be silent in the face of this development eating into their business model.

It will be an intermediary token for financial institutions to move value among themselves. In short Ripple is not an everyday currency to be used by common folks. I don't think there is even a wallet for it. I suspect that most are held on exchanges and by the banks.

High fees is an extinction event.

Anybody who has a sizeable BTC holding is certainly now worried that their "store of value" may be in jeopardy. As we can see most of this value is moving to Ripple. When they realise that Ripple cannot be a store of value, much of that value will look for a new home - Bitcoin Cash.

Bitcoin Cash is the real bitcoin. It always was. The fork was BTC which added Segwit. Bitcoin Cash is still the same Bitcoin that I knew and loved in 2013. More and more people are beginning to realise this, as they find that they can no longer use their bitcoin to transact. All businesses that use to accept bitcoin have stopped accepting it.

The only argument left is for it to be a "store of value" and that is gone too, now that value have moved to Ripple! of all things. I guess people still want to trust banks. But they have to realise that banks do not own Ripple, and Ripple does not represent shares in the banking system.

Bitcoin will still achieve valuation of 100,000 and even 1 million a coin.

However that is in reference to Bitcoin Cash. This will happen when BTC is booted off the bitcoin mining algorithm. For me this can't happen soon enough. Bring on the Chain Death Spiral.

What are miners are waiting for? They are in control of BTC's fate.

What do you know. BTC's hashrate just plummeted 6EH from 18 to 12 and still dropping. Maybe this is the flippening happening now. Watch BCH price action to confirm.

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Till Death Do Us Part - The Partening

BTC : " Where should I go? What should I do?"

BCH : " Frankly my dear, I don't give a damm "

             

This big block/small block saga like the story above, started well. So what happened? And as the question begs. Where should BTC go? What can BTC do?

Sadly, for BTC there are no good outcomes. The Chain Death Spiral has set in and it can only have one ending. The BTC chain will come to a grinding halt, because the little hashing that is left, will not be enough to take it past the next difficulty adjustment, if it makes it past the one coming up.

At the very core,(pun intended) the real difference between BCH and BTC is that people embracing BCH believe in the protocol while people embracing BTC believe in the development team. Because the protocol was held hostage by the development team, this current state of affair arose. Never again should we allow, or even make it possible for any faction, not even miners, hold the protocol hostage.

We are now watching the end game play out. The value of BTC is crumbling. The parties holding the price up will soon give up completely. It is futile, When the chain in question is impossible to use, it does not have a value. Already 38.95% of the hashrate have migrated to BCH and they are never going back, despite wishful assurance that they will, arguably to chase better profits. In reality, for a large majority of miners, the bitter experience of the past have been too painful. In addition it also does not make any sense to be mining on both chains.

A miner now earns 83% less, mining on the BTC chain. In addition he wont be able to cash out for at least 2 days and by then the prices could have fallen further. No commercial miner can absorb these losses for long, no matter how strongly he supports the losing chain. His losses are uncapped, unknown and uncontrollable. Contrast this situation to that of the initial early BCH miner. He could allocate and budget for a cash burn until the project succeeds. His losses are capped, known and controllable.

BTC price may never recover. It will slide downwards with decreasing usability, The BTC chain may never be profitable to mine on again. On the other hand the price of BCH will trend upwards with increasing hashrate migration.

The End

Soon, BCH block height will surpass BCT to become the longest chain. By then it may even have the higher amount of hashing power. The BTC chain will just grind to a halt. It may not even see the next difficulty adjustment. The core team can move their agenda to Litecoin. The natural order and balance of the crypto universe will be restored. 

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Will The Real Bitcoin Please Stand Up. Please Stand Up.

Over 2600 years ago, far away in the mist of time, in ancient Turkey, the Lydians and the Medes had been at war for 5 years. According to the Greek philosopher Herodotus, in the year 585 BCE, in the midst of battle, there was a solar eclipse and day was turned into night. The Lydians and the Medes took it as an omen that the gods wanted them to stop fighting and so peace ensued.

Tomorrow 21 August 2017 there will be solar eclipse over large swathe of the USA. On this day the Big Blockers and Small Blockers who have been at war for nearly 5 years decided to lay down their keyboards and peace came upon us and the community was once again united.....LOL NOT.

Back to reality

Over the last 3 days the whole of crypto and mainstream media was ablaze with the news of the nearly five fold increase in BCH price to over 1000 USD, sweeping aside all predictions of its' early demise. Of course to those of us who are of the opinion that the BCH fork was a fork back to the original bitcoin, we are not at all surprised. It was rather expected and with the anticipation of more to come, until the Cashening.

Fitting in the pieces

Looking back, we learn that 55% of the trading volume over the last 24 hours amounting to 1.7 Billion USD, yes billion with a "B" was transacted on 3 South Korean exchanges. To put this in context, the total worldwide 24 hour trading volume for BTC was only 2.6 billion. More important was that the 1.7 billion was in fiat. Not BTC. It is clear now that BCH explosive price rise was a result of heavy buying from South Korea with "new money".

So why only South Korea and for BCH? There was no buying pressure from China or Japan. China played a huge part in BTC trade volume until the Chinese government clamp down on the exchanges. The slack was later picked up by Japan when the Japanese Government legalise Bitcoin on 1 April this year. Then on 24 July South Korea made bitcoin payments legal.

South Korea the world's 12 largest GDP and a East Asian Tiger economy made its' mark in the crypto world with a huge play in BCH. South Korea the home of Samsung with 17% share of the world mobile phone market is now officially in the crypto business, and they selected BCH as their vehicle.

This is significant and mark the difference in philosophy and approach by these 3 East Asian economic competitors. China chose to develop their own national digital currency. Japan decided to go with BTC and South Korea have chosen BCH. Who will be right?

Coming back to the 1.7 billion USD 24 hour trade in BCH. This amount of money cannot come from just ordinary citizens. Large institutions and perhaps even banks are involved. This play is not over. Not by a long shot. Expect to see higher and quicker price rises in BCH, especially when the rest of the world catches on to what is really happening.

Will the real Bitcoin please stand up.

Yesterday for the first time it became more profitable to mine BCH than BTC. Today at block 479808 BCH had its' first standard difficulty adjustment and is now only 7% the mining difficulty of BTC. These are watershed moments and marks the point at which miners will choose to mine the more profitable BCH chain, and initiating the dreaded Chain Death Spiral for BTC. So when will BCH replace BTC as the real Bitcoin?

In a Twitter post, Gavin Andresen said that he will refer to BCH as Bitcoin if it has the longest chain and his view is echoed throughout the community. Over the last 24 hours 139 BTC blocks and 263 BCH blocks were found respectively. This is a difference of 124 blocks. As of now the BCH chain is 1452 blocks behind  BTC. This means that in as little as 11 days and most probably earlier the BCH chain will overtake the BTC chain to become the longer chain. Will we then call BCH Bitcoin?

Another twist. Ryan Charles in his latest Youtube post suggested that BCH should just be called CASH. Wow. What a great idea. A totally left field proposition and yet on reflection its' simplicity is indeed powerful. BCH is exactly that - CASH - Spending Money.

So now we come back to the question of  between China, Japan and South Korea, which country chose correctly. My money is on South Korea. What's yours?



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