BitMEX Studies Bitcoin Cash Hashwar, Finds BCH ABC and BCH SV Are Mining with Significant Losses


The Bitcoin Cash (BCH) hashwar begun on November 15. Over the last 24 hours, the two sides have battled for control of the world’s fourth largest cryptocurrency. A BitMEX analysis from earlier today reveals just how costly the battle has become: both BCH camps are mining at a major loss.

One reason why bitcoin is secure is because it costs money to mine bitcoin. That means if someone wanted to attack the bitcoin network, they would need to invest a huge amount of resources into doing so. Attackers have limited financial incentive to do so, which is why bitcoin has never suffered a 51% attack.

Similar mechanics are at play in the Bitcoin Cash hashwar. Neither camp is revealing how much they’re spending to mine the two different BCH forks – ABC and SV. However, a recent analysis from BitMEX reveals just how much the hashwar is costing both sides.

BitMEX revealed the results of their research in a tweet earlier today, saying:

“Although the ABC SV split is entertaining, we estimate that SV miners are burning US$280,000 per day mining the SV chain.”

BitMEX based its assumption on the fact that SV miners were using S9 and that they were able to sell SV coins at the current spot price of $100 while spending 5 cents per kWh on electricity – all of which seem like reasonable assumptions.

BitMEX added that they believe the ABC side will reign supreme in the long run:

“Even if the SV mining collation do catch up with ABC or if they manage to do hostile chain re-orgs, its highly unlikely BCash ABC users & investors will ever switch to follow SV. ABC users just need to be patient & wait it out. @CalvinAyre & the SV miners will eventually give up.”

Bitcoin Cash ABC Miners Are Losing Twice As Much Money

In a follow-up tweet, BitMEX also revealed just how much the hashwar is costing ABC miners.

“Bitcoin Cash ABC miners are also making considerable daily losses, even larger losses than SV miners, according to our estimates,” writes BitMEX on Twitter.

Bitcoin Cash ABC miners are losing $439,221 per day by mining Bitcoin Cash ABC, compared to losses of $278,000 per day from the Bitcoin Cash SV side.

BitMEX’s analysis of ABC losses comes by looking at the price for Bitcoin Cash ABC ($283), the mining cost per coin ($527), the 24 hour electricity bill ($948,621), and the 24 hour value of the mined coins ($509,400). When you add up all these numbers, you get a loss of $439,221.

It costs more to mine BCH ABC because the network has roughly twice the difficulty of BCH SV, making the coins approximately twice as expensive to mine.

Can Miners Even Sell ABC and SV Coins?

BitMEX’s loss estimate may be too conservative. The actual losses from ABC and SV miners might be much higher. That’s because it’s not guaranteed that either miner can sell its mined coins. The markets for ABC and SV coins isn’t as liquid as, say, the market for BTC.

Yes, the spot price for BCH SV is $100, but there’s no guarantee miners are able to sell their huge volumes of BCH SV at that price. BitMEX also used a conservative energy estimate of 5 cents per kWh.

“We assumed quite cheap energy costs. We do not know the true cost, but we made the same assumptions for all three coins.”

Bitcoin (BTC) Remains the Most Profitable

While both camps of BCH generate huge losses, bitcoin (BTC) mining remains very profitable.

BitMEX’s analysis shows that bitcoin can be mined at a cost of $3,341 per coin. You can sell BTC for $5,500 per coin, generating daily profits of $4,084,432.

Ultimately, it’s unclear how the Bitcoin Cash hashwar is going to shake out. Both the ABC and SV sides, however, will need deep pockets if they want to continue mining their respective forks while generating huge losses.

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