{"id":41726,"date":"2019-12-20T09:02:51","date_gmt":"2019-12-20T09:02:51","guid":{"rendered":"https:\/\/www.cryptocabaret.com\/?p=41726"},"modified":"2019-12-20T09:02:51","modified_gmt":"2019-12-20T09:02:51","slug":"reports-criticize-bitcoin-sv-miners-and-the-chains-upcoming-fork","status":"publish","type":"post","link":"https:\/\/www.cryptocabaret.com\/?p=41726","title":{"rendered":"Reports Criticize Bitcoin SV Miners and the Chain\u2019s Upcoming Fork"},"content":{"rendered":"

\"Two<\/p>\n

In the last two days there have been two critical posts published against the Bitcoin Satoshi’s Vision network (BSV<\/a>). On December 17, Binance Research published an allocation mining report that analyzed the mining activities of BTC<\/a>, BCH<\/a>, and BSV<\/a> and the research detailed that BSV<\/a> miners are mining irrationally to protect their investment. The following day, the firm Bitgo published a report that disclosed it will be depreciating BSV<\/a> because of the upcoming hard fork that aims to remove Pay-to-Script-Hash (P2SH) outputs.<\/strong><\/p>\n

Also read: Plustoken Cash-Outs Could Be Behind BTC Price Drop, Says Report<\/a><\/strong><\/em><\/p>\n

Bitcoin SV Mining Criticized by Binance Research<\/h2>\n

The Bitcoin Satoshi’s Vision network (BSV)<\/a> is being criticized for a couple of reasons this week and the topics are trending within the cryptosphere’s chatter. For instance, on Tuesday the research team for the crypto exchange Binance published a report<\/a> that disclosed the mining activities of BTC<\/a>, BCH<\/a>, and BSV<\/a> in 2019. The report highlighted that cryptocurrency mining has become far more competitive and revealed that BSV<\/a> miners are mining at an opportunity cost. Usually, an opportunity cost means that a cost is incurred for irrational reasons, rather than enjoying the profits associated with the best alternative choice. When comparing the BTC<\/a>, BCH<\/a>, and BSV<\/a> networks, Binance researchers underlined that “cryptocurrency mining for BCH<\/a> was often more economically rational.” However, when it comes to BSV<\/a> mining in 2019 it “involved a significant opportunity cost for most of 2019, which is estimated at more than 15% of its total mining revenue for its entire history, since the November 2018’s fork.”<\/p>\n

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The cumulative estimated cost of opportunity to mine BSV<\/a> (instead of BTC<\/a>) in USD according to Binance Research.<\/figcaption><\/figure>\n

All three blockchains use the same hashing function and throughout the year, BSV<\/a> miners suffered the worst according to the Binance report. “In less than a year, an estimated $12-13 million could have potentially been collected by Bitcoin SV miners, if they were acting rationally in their mining resource allocation,” the study notes. “In comparison, BSV<\/a> total mining rewards (assuming miners selling BSV<\/a> coins at the end of each business day) were around $75 million over the same period. As a result, this potential opportunity cost represents around 16-17% of the total BSV<\/a> mining revenue over the period.”<\/p>\n

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Difference (%) between BSV<\/a> and BTC<\/a> reward-to-difficulty ratios (November 15th, 2018 – December 15th, 2019) according to Binance Research.<\/figcaption><\/figure>\n

Bitgo Plans to Depreciate BSV<\/a> Support<\/h2>\n

Following the report from Binance Research, another post<\/a> was published the next day by the Bitgo<\/a> developer known as Murch<\/a> in regard to the upcoming BSV<\/a> chain fork. According to the post, Bitgo is urging BSV<\/a> users to withdraw BSV<\/a> from the company’s platform because Pay-to-Script-Hash (P2SH) outputs will soon be invalidated. This is because, on February 4, 2020, BSV<\/a> is planning to upgrade with the “Genesis Hard Fork,” which plans to remove P2SH. “Since Bitgo’s BSV<\/a> wallets use P2SH-based multi-signature addresses, the protocol change will render Bitgo BSV<\/a> wallets unable to receive funds,” Bitgo’s notice detailed. Murch writes that starting February 4, 2020:<\/p>\n