Cryptocurrencies are making major changes to our lives and futures trading.
Looking into the past, analyzing the present, and forecasting the future.
It is quite obvious that in their aspirations and goals to earn a higher level of income, most miners are rushing about and cannot finally decide: choose between such cryptocurrencies as bitcoin or bitcoin cash.
But what caused this uncertainty?
Let's take a closer look at Bitcoin mining: Approximately every 10 minutes on the network, bitcoin miners receive about 14 BTC. This parameter includes 12.5 BTC for rewards, and about 1.5 BTC in commissions (because the side is filled normally). Until the Bitcoin Cash currency appeared, miners and other platform participants simply could not choose from other - more alternative options and solutions.
Of course, there are various altcoins (coins) on the network with a slightly increased level of profitability, but all of them are traded in small volumes, and, accordingly, have a low level of liquidity. For a player-miner, the process of mining coins, subject to low liquidity, will not be a very responsible step, which is associated with certain risks: this is since they will have to mine daily (or even weekly) coins in a rather short time. The sale of coins with a low level of liquidity can cause great difficulties: the process of powerful sales will provoke a decrease in prices (sometimes even very significant), which in turn will lead to a drop in mining profitability.
As a result of all of the above factors, large players will rarely be interested in mining coins that have low liquidity indicators. But in addition to the profitability of such an activity, mining, or rather miners, have 2 key components that need to be calculated and determine which of the coins can be a more highly profitable instrument. Profitability, for a miner, includes such components - price and complexity.
Since bitcoin and bitcoin cash have an identical function (proof of work), as long as we know the approximate price and complexity, it is relatively easy to calculate the yield. In other words, the formula is BCH profitability = relative cost / relative difficulty. That is, if 1 BCH = 0.13 BTC, taking into account that the difficulty of mining bitcoin cash is equal to 10% of the difficulty of BTC, then: Profitability 0.13 / 0.1 = 1.3, and from this, it follows that the bitcoin cash cryptocurrency will bring a higher rate of profitability when mining than regular bitcoin. Any parameter that goes beyond the boundaries of one implies that bitcoin cash mining is initially more profitable than classic bitcoin.
The dependence is as follows: the higher the price, the correspondingly higher the profitability. The higher the difficulty level, the lower the profitability. When Bcash was born on August 1st, its difficulty level in mining was the same as in Bitcoin. Since bitcoin cash is a derivative of the main cryptocurrency - bitcoin, this electronic tool inherited some properties from the first, including significant complexity.
Since BCH traded at a very low price relative to bitcoin, this affected BCH mining, making it more unprofitable. But one way or another, BCH (when compared with other altcoins) has the main advantage - it stands out for its liquidity.
There is an impressive market for this instrument - the market of buyers: many players, traders and simply those who support its idea continue to buy BCH.
If you look at this from an economic point of view, it was profitability, not liquidity, that became the reason for miners not to deal with BCH during the early stages of its development, formation, and existence.