The BCH community has withnessed its first mining reward halving on Apri 8, 2020, on the occasion of this event, the Future of Bitcoin Cash team invited one of the most famous figures in Bitcoin Cash mining, BTC.TOP CEO Jiang Zhuoer, during its marathon live stream. Below are some questions asked during the Bitcoin Cash halving livestream.
Jiang Zhuoer, CEO of BTC.TOP, is a renowned major miner in China. He personally owns over 100K miners, which makes him one of the largest individual miners in the world. In the Chinese crypto community, Jiang is well known as a Bitcoin educator in addition to his miner identity. He has been very actively promoting Bitcoin and publishing articles. His article — — “What is Bitcoin”, published on Zhihu (one of the largest knowledges sharing platforms in China) has attracted millions of views.
Question 1:
Bitcoin Cash is halving today, and the halving of BTC will occur in 35 days. We have noticed that the BCH price fluctuates a lot today. Many people believe that the BCH price would go up because the total supply is decreased as a result of the halving. On the other hand, there are people who have the totally opposite view. These people think that the bullish signal has been consumed before the halving. Thus the BCH price would go down after the event. What’s your opinion on this ?
Jiang Zhuoer Talked on BCH halving Zoom
Jiang’s Answer: People come to me asking the same question every time when the halving is around. The last time was in 2016. I always give the same response: Bitcoin halving is not only good news, it actually brings long-lasting positive outcomes.
What does the positive outcome mean? I’ll give you an example: an oil company has discovered a new oilfield, what do you think will happen with the company’s stock price? Do you think its stock is going up or going down?
The stock price of the company would actually go up as the increase of the company profits. That’s because the new discovered oilfield would bring long-lasting revenues.
The same scenario goes to the Bitcoin halving. Once the event happens, it’s like a billionaire buying 900 Bitcoin every day and destroying them. The influence of such activity is long lasting.
Especially with the current financial crisis, the market lacks funds and confidence. In such a situation, a billionaire injecting funds into the market becomes helpful because it would change the ratio of the funds supply and demand. As such, I think the Bitcoin price will go up.
For the view of the bullish move having happened before the halving, we can simply refer to the historical data. In 2016, a year of halving, Bitcoin price increased by 50 times. The theory of “price in” falls apart.
Why does “price in” theory fail? That’s because the crypto users are expanding as Bitcoin continues developing rapidly. Many users coming to the market in the next two years have not joined the community yet. Thus the “price in ‘’ theory is not applicable without the majority of future users in the market.
Question 2:
Last year, the Litecoin price skyrocketed before the halving and then dropped back. Do you think the same thing would happen to the Bitcoin Cash?
Jiang’s Answer: The reason why Litcoin price dropped back to the pre-halving level is the timing. The Litecoin halving happened in a bearish market cycle. We can observe the similar Litcoin halving pattern in 2015 and 2019. The Litcoin price chart of 2015 reflects on the price trend in 2019.
Because BTC accounts for over 70% of the total crypto market cap, the bull market won’t arrive until the BTC halving. LTC halving can’t lead the bull market. As such, the price dropped back to the previous level after the halving. However, the halving time between BCH and BTC is very close, both coins would benefit from the bull market and BCH price won’t drop back.
Question 3:
We know that Bitcoin was invented after the 2008 global financial crisis. This year we are facing the Coronavirus pandemic, and the price of the global stock market and other assets collapsed. Do you think the current situation will accelerate Bitcoin development?
Jiang’s Answer: The financial crisis is actually beneficial for Bitcoin. Don’t be discouraged by the steep price drop on March 12. This financial crisis will greatly increase the peak price of bitcoin when this next bull market arrives.
If we assume that in this bull market BTC’s peak price is $100k, when the current financial crisis does not exist, we can expect peak price to reach $200k、$300k or even more in a situation of financial collapse.
The governments are printing money to save the market. Bitcoin was created in the 2008 subprime mortgage crisis to fight against the governments’ money printing. When the Federal Reserve System prints trillions of dollars, the value of Bitcoin will be proven by the market.
Question 4:
Thousands of cryptos are existing in the market. What are the advantages of Bitcoin Cash compared to BTC and other cryptos?
Jiang’s Answer: The main difference between BCH and other cryptos is the level of decentralization.
Blockstream, the development team of BTC, believes that it should achieve a very high-level of decentralization through micro computers, such as Raspberry Pi, which runs the Bitcoin nodes. Thus they insist on the maximum 1mb block cap and do not scale.
However, even the good things can turn bad in excessive quantities. Just like drinking water is important, but you can be poisoned with excessive consumption of the water. The same with the block size. As long as the block size does not exceed 100mb, which is the current performance limitation of regular computers, there should not be any issue with decentralization.
BTC insists on excessively small blocks, and excessive decentralization, which leads to a decline in the number of users that it can accommodate. When the utility of BTC falls behind BCH, it will eventually become centralized due to its limited volume.
BSV made the same type of mistake. BSV insists on excessively large or even infinitely large blocks, which will result in excessively high node performance requirements. Only very limited hardware can run the nodes, thus only a few big nodes survive . Decentralization does not exist in such a model.
What suits best is this. The BCH block size is neither too large nor too small, hence it is the best option.
Question 5:
In the financial crisis, people are more conservative with investment. Purchase of the crypto seems to be too risky for many people. Do you have any good investment advice to give?
Jiang’s Answer: As a miner, my suggestion is: buy the latest miner model, such as the Ant S19 miners. Why is this a good option? Because you are likely to lose the money when the crypto price drops in the financial crisis. On the opposite, purchasing S19 will not necessarily lead to such loss.
- S19 is the best miner at the moment, and you don’t need to turn off the miners when other miners shut down in a bear market. The hash rate would drop when fewer miners are working. S19 can continue mining and continue replacing the cost of the miners.
- With the slumping market, the marked price for S19 is low. Its price is even lower than the S17 . In short, the price of a new model is cheaper than the old one. If you purchase S19 for mining now, it will not take a long time for you to bring your miners’ cost down to a low level that is even lower than the production cost of Bitmain. At that point, you will be absolutely safe in the market.
- In summary, you can buy S19 if you think buying crypto is too risky. Mining cryptos with lower cost and you keep cryptos. It is a very safe strategy. You are not likely to lose money value measured in US dollars, and can stock up cryptos at a low cost.
- Nowadays, mining has become a very specialized field. If you want to be a miner but have no idea where to start, you are welcome to join B.TOP. Be our mining partners and we do joint mining. For details, visit our website B.TOP.
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