Will BCH bottom with the difficulty adjustment?
While we aren't in the business of picking bottoms, it's interesting to note that the Bitcoin Cash algorithm (the program that runs the Bitcoin Cash protocol) had a -72% difficulty adjustment in the past 24 hours. This makes it easier for miners to mine new blocks and increases the speed at which blocks are mined, increasing the odds that a miner will mine a new block, and making the practice more profitable.
The Bitcoin and Bitcoin Cash protocol aims for 6 blocks per hour, or about 144 blocks per day. This rate is controlled by the algorithm's "difficulty adjustment" which acts like a thermostat: if blocks are mined too rapidly, the algorithm becomes more difficult and vice-versa. In the past 24 hours, the Bitcoin Cash difficulty adjustment dropped 72% and the pace of blocks mined increased to 493 blocks, making the business more profitable.
Trading volume of the Bitcoin Cash token has increased in the past few hours, however, the price continues to decline. Whether or not a key bottom is reached at the same time the difficulty adjustment drops precipitously will give us a clue as to future conditions that may impact price behavior. Future charts will need to include data as to changes in difficulty adjustment and block mining profitability.
Remember, this asset class is brand new (Bitcoin Cash is only 2 months old!) and the investment community is still trying to determine the variables that drive price.
More on this development in future updates.
The Bitcoin and Bitcoin Cash protocol aims for 6 blocks per hour, or about 144 blocks per day. This rate is controlled by the algorithm's "difficulty adjustment" which acts like a thermostat: if blocks are mined too rapidly, the algorithm becomes more difficult and vice-versa. In the past 24 hours, the Bitcoin Cash difficulty adjustment dropped 72% and the pace of blocks mined increased to 493 blocks, making the business more profitable.
Trading volume of the Bitcoin Cash token has increased in the past few hours, however, the price continues to decline. Whether or not a key bottom is reached at the same time the difficulty adjustment drops precipitously will give us a clue as to future conditions that may impact price behavior. Future charts will need to include data as to changes in difficulty adjustment and block mining profitability.
Remember, this asset class is brand new (Bitcoin Cash is only 2 months old!) and the investment community is still trying to determine the variables that drive price.
More on this development in future updates.
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