Just recently, Charlie Lee attended CoinsBank Blockchain Cruise, and he had a few things to say about some select cryptocurrencies that seem to retain quite some clout in the market at the moment. His focus was mainly on Bitcoin Cash. All things considered, the creator of Litecoin didn’t have nice things to say about Bitcoin cash.
Deconstructing Bitcoin Cash
First off, Charlie set about evaluating BCH in terms of its resistance to censorship, production cost, immutability of its transactions, and the availability of enough money supply. Based on these factors, Lee gauged the crypto’s value against Bitcoin, Ethereum, and Litecoin.
Talking about Bitcoin Cash’s current resistance to censorship, Charlie had an issue with the crypto using the same functional algorithm as Bitcoin, and also the fact that BCH only runs on about 6% of Bitcoin’s hashrate power.
“So even a small pool, or even a small mining farm, can effectively censor all of the transactions if they wanted to. So an effective attack would be they would shift to Bitcoin Cash and they just mine Bcash solely and deny any other miners blocks. Once that happens, all the miners will quit mining Bitcoin Cash because all their blocks will be orphaned, and they will be losing money, so they will go back to mining Bitcoin.”
BTC Miners Could Censor BCH
Going further, Charlie explained that BCH’s relatively minimal hashrate power as compared to Bitcoin’s means that even a small pool of Bitcoin miners could potentially end Bitcoin Cash if they so wanted, owing to the fact that a concerted focus on mining Bitcoin Cash would result in censorship whereby only a few select (or even a single) miners would take over BCH’s total blockchain infrastructure.
This is possible mainly because the mining equipment for Bitcoin is the same used for Bitcoin Cash, so the Bitcoin miners debuting into large-scale mining of BCH wouldn’t need to incur further costs in equipment investment. That scenario would have the effect of driving away other miners since they would be left with empty blocks with little or no economic gain to mine.
In effect, that kind of censorship would trigger a significant dip in BCH’s price, and potentially wipe it out of existence altogether – if Bitcoin’s hashrate power were to be used to mine BCH blocks from their point of origin. In his estimate, Charlie opined that this end-result would happen within 20 days of the censorship.
On the other hand, that scenario is very highly unlikely to happen to Litecoin or Bitcoin. With these two, the functional algorithm is unique, meaning that anyone trying to go all in or censor the network would have to incur significant costs for the equipment needed, besides having to deal with their huge hashrate.
But Charlie said such a scenario was unlikely since no Bitcoin miner would want to waste their time and technical investments in mining a crypto that has far less market value than Bitcoin.