In what one senior analyst calls a struggle “to remain relevant,” Bitcoin Cash (BCH) has been burning $12 worth of its own supply every day — hoping the increased scarcity will help in its fight against its dominant competitor, Bitcoin (BTC).
‘Purely a PR game’
Bitcoin Cash (BCH), a hard-forked cryptocurrency meant to solve Bitcoin’s (BTC) scalability issues, is up 100 percent against the USD in the last seven days. Trading against rival BTC, BCH is up 75 percent — while remaining 50 percent up against Ethereum (ETH) and 45 percent up against Ripple (XRP).
This news comes as a surprise to some, who’ve watched Bitcoin Cash languish during 2018’s bear market.
Recently, greater concerns over BCH’s long-term utility have come to light, with SegWit — an implemented soft fork change in Bitcoin’s transaction format which increases transaction times while lowering fees — proving the winner against Bitcoin Cash’s big-block solution.
Furthermore, the successful implementation of Lightning Network — a “second layer” payment protocol that operates on top of Bitcoin’s blockchain — should only further hamper Bitcoin Cash’s cause.
So why the sudden gains? According to some, it’s little more than artificial price movement in Bitcoin Cash’s continual PR campaign to garner attention away from its big brother.
Antpool, a Bitmain-run mining pool which confirms 8.2 percent of all Bitcoin Cash transactions, has been voluntarily burning 12 percent of the coins it receives by sending them to a dedicated “black hole address.”
Kyle Samani, the managing partner at the Austin, Texas-based Multicoin Capital cryptocurrency hedge fund, told Bloomberg in an email:
Antpool has burned $12 worth [of Bitcoin Cash a day]. This was purely a PR game so they could say ‘reducing supply.