Mining hardware giant Bitmain has declared it will now accept only Bitcoin Cash for its latest equipment as a cost-saving measure. It’s a radical shift for one of Bitcoin’s biggest names, and will no doubt raise questions over Bitmain’s long-term plans.
According to industry commentator Jimmy Song’s analysis, Bitmain chips power about two thirds of total Bitcoin hashing power (via buyers, not directly by the company). It could stand to make $140 million USD profit on new Antminer S9 sales, he added.
Bitmain’s Reason: Transaction Fee Savings
According to CEO Jihan Wu, the main reason for the decision was Bitcoin Cash’s lower transaction fees compared to Bitcoin. He recommended others follow Bitmain’s lead.
“Bitcoin Cash is lower on transaction fees and it can save us lots of cost,” he told Bitsonline.
“Bitcoin Cash has a roadmap that will keep the transaction fees always low, and every sane manager should consider accepting Bitcoin Cash as a payment option to save the transaction cost for their customers and shareholders.”
Bitmain sells mining ASIC hardware officially only through its website, which before today accepted Bitcoin as the primary payment method. A visit to the online store confirmed that BCC isn’t just an option — it’s the only option for purchasing the new Antminer S9:
Did Bitmain Make a Smart Move?
Some long-time Bitcoin community members questioned the wisdom of Bitmain’s move. Bitcoin Cash and the circumstances that created it are still highly controversial. Given the conversation over the past year, Bitmain should expect to experience some backlash from its customers and other Bitcoiners.
“Clever move,” said one on Reddit’s r/BTC forum, while others suggested it could boost demand for BCC. Others were more cautious. Overall, reactions were mostly neutral, with many commenters taking a “let’s see how this goes” approach.
It could be a sign Bitmain and other powerful companies are planning to throw even more weight behind Bitcoin Cash. Some supporters of the forked currency claim it represents the “true” Bitcoin, while other supporters believe its role is to become daily spending “cash”, rather than replace Bitcoin itself.
BCC currently trades around $390. Its value has not plummeted since its inception, as detractors predicted.
As far as mining itself goes — Bitmain-associated pools’ hash rate is from mostly miners that own their own mining rigs. The company gives them the choice to mine any chain they like. Over the past two months, that hash rate has swung between BCC and BTC, a situation that is likely to continue for a period of time.
Wu a High Profile Big-Block Supporter
Perhaps Bitmain’s increased support for Bitcoin Cash isn’t that surprising. Wu has long been a supporter of larger Bitcoin transaction blocks, and has opposed the Bitcoin Core team’s plans to keep the limit at (around) 1MB.
He has posted several links to articles that criticize Core on Twitter, and is regularly associated with Bitcoin Cash proponent Roger Ver. It’s important to note that both Ver and Wu remain evangelists for Bitcoin itself — at least, while the arguments over block sizes are still ongoing.
Bitcoin faces a second contentious hard fork in November when miners must decide whether to support the “2x” block size increase. The first part of the SegWit2x plan happened at the end of July when those miners supported a move to implement segregated witness transactions and other changes.
What do you think of Bitmain’s decision — is it a smart one? Let us know in the comments.
Images via Bitmain, bitcoincash.org