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Jimmy Song Explains Why Bitcoin (BTC) Miners Won't Pay 97 Percent of Bitcoin Cash (BCH) Tax

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Fri, 01/24/2020 - 19:53
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  • The claim that Bitcoin miners will pay 97 percent of the diminished profitability is 'deceitful,' according to Jimmy Song

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In his new blog post, Bitcoin (BCH) developer Jimmy Song has meticulously dissected the argument that the entire set of SHA-256 mining will be affected by the Bitcoin Cash (BCH) tax proposal.

Earlier this week, Jiang Zhuoer, the CEO of BTC.TOP, proposed a new Bitcoin Cash soft fork that would impose a 12.5 percent tax on BCH miners and allocate money to a development fund that will be used to build the ecosystem of the fourth biggest cryptocurrency.

His Medium post, which was signed by none other than 'Bitcoin Jesus' Roger Ver, would put an end to voluntary donations that turned out to be a failed funding model. All miners who refuse to pay the tax would see their blocks orphaned, meaning that that wouldn't get a block reward at all, which is the most controversial part about Zhuoer's initiative.

Despite the fact that the tax would reduce the profitability of Bitcoin Cash mining by 12.5 percent, Zhuoer argued that Bitcoin miners would bear the cost because of the hash ratio between the two forks. The implementation of the soft fork would make it less profitable to mine BTC right on the brink of reward halving

Song calls the aforementioned claim 'deceitful.' He claims that the argument about slashing demand for all SHA-256 coins is only true on 'a cherry-picked, 'first-order basis.' The tax proposal doesn't take into account the security costs and second- and third-order effects.  

Furthermore, there are multiple questions about the long-term viability of the fork. It is unclear whether or not BCH will change its inflation schedule to fund both miners and devs. 

Song wrote that he plans to get 'some popcorn' to watch for this new Bitcoin Cash drama. 

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Tue, 03/31/2020 - 19:25
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  • Bitcoin (BTC) bulls have high hopes for Q2 after the coronavirus-induced crisis tanked the price of the leading cryptocurrency

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Contents

Bitcoin, the number one cryptocurrency by market capitalization, is set to finish its tumultuous first quarter of 2020 in the red with a 10.65 percent drop, according to crypto data provided by Skew.    

As reported by U.Today, it suffered a price crash of enormous magnitude due to the coronavirus pandemic that resulted in the global economic shock. 

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The stellar quarter that wasn't 

In early 2020, Bitcoin was on track to have its best Q1 since 2013. In fact, it gained more than 50 percent after reaching its current yearly high of $10,508 on Feb. 13. However, this rally hit a snag and BTC printed its first negative February close in six years

All bull dreams have been brutally shattered after the 'Black Thursday' of May 12. On top of halving its price in less than one day, BTC was actually in great danger of hitting zero because of a string of liquidations on BitMEX. 

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The odds are in the bulls' favor  

That said, there is still a good chance that the bulls can stage an impressive comeback in Q2, which is historically the most successful quarter for the leading cryptocurrency.

Last year, BTC kicked off its impressive rally on Apr. 2 with a sudden 20 percent price pump.   

At press time, BTC is sitting at $6,480, continuing its streak of range-bound price action.  

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Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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