2021 bitcoin cash price prediction based on consensus used
2021 bitcoin cash price prediction based on consensus used

By quintomudigo | Teacher forex school | 10 Mar 2020




Bitcoin cash is a native coin of the Bitcoin cash network which came as a result of the Bitcoin hard-fork and whose transaction takes place from one smart contract address. The first smart contract address must pay a transaction fee in order for the transaction to be initiated to the Bitcoin cash network by the miners running the network. This makes it to be considered as a decentralized asset. Since the miners are the one running the network, it can therefore be considered to be using a proof of work consensus. In the proof of work consensus, the Bitcoin cash miners lease their computing power to be used by mining pools to secure the Bitcoin cash network as well as to validate any transaction taking place on the Bitcoin cash network. In return, they receive reward in form of new coin minted as well as fees received . Towards the end of August of 2017, the Bitcoin network went through a hard-fork which result to a fork of Bitcoin cash network with a native coin being Bitcoin cash. During that time, those people who were holding some amount of Bitcoin in their Bitcoin address were able to receive the same amount of Bitcoin cash based on the same amount of Bitcoin they had in their wallet by that time. During that time, one Bitcoin cash was going for around $200. 4 months later, the price had managed to go all the way over $3700. The price then went down to below $76 as 2018 was winding up. Today, the price is trading at around $280. The increase in price was due to an increase in the number of miners for a very short period of time while the decrease in price again was due the miners dumping their earned Bitcoin cash to several exchanges so that they can profit from high price. Therefore, the future price analysis for Bitcoin cash can therefore be predicted based on the consensus used as follows;

Consensus used
Bitcoin cash which is a hard-fork of Bitcoin uses a proof of work consensus. In the proof of work consensus, the miners can either decide to become solo miners or they can pool their computing power to a mining pool in order to share reward. In the mining pool, the miners will be able to receive their reward based in the computing mining power they share. The more computing power they share the more reward they receive while the little mining power they share the less reward they receive. The mining pool will use the computing power shared to secure the Bitcoin cash network as well as to validate transactions taking place on the Bitcoin cash network. In return,they receive reward in form of new coin minted as well as fees charged. Therefore, we can say that an increase in the number of miners in Bitcoin cash network will result to an increase in the utility function of Bitcoin cash which will further increase its demand thus causing its price to increase. On the other hand, we can say that a decrease in the number of miners in the Bitcoin cash network will result to a decrease in the utility function which will also decrease its demand thus causing its price to decrease. Therefore, we can predict the 2021 price for Bitcoin cash based on bullish and bearish condition as follows;

1. Bullish Bitcoin cash price analysis

In a bullish market, the bitcoin cash will be moving in an upwards direction. In late 2017 when Bitcoin cash came to be as a result of the hard-fork of Bitcoin, one Bitcoin cash was going for around $200. Within 3 months, the price went up all the way to around $3700. This increase in price was due to an increase in the number of miners beginning to mine Bitcoin cash by that time. The price then dropped to around $76 as 2018 was winding up. This decrease in price again was due to miners dumping their airdropped Bitcoin cash by that time together with their mined Bitcoin cash. Today, the price of one Bitcoin cash has dropped to around $280 and is currently trading at around there. The mining reward of Bitcoin cash keeps of halving after every four years. The first halving is likely to take place in one months time. By that time, the reward per block will also decline. Therefore we can say that if the number of miners for Bitcoin cash will have increased towards the beginning of 2021, then the demand for Bitcoin cash will also increase thus causing its price to also increase. Here is the chart showing the price prediction of Bitcoin cash by the end of 2020;  

  351665157-3ed9e36ac650cef24f5f3ca441b6f6ae200ac44c8fad5bae5e6293163caeb5c6.png    

 

The above is the Bitcoin cash market in terms of USDT. Two points are being indicated. There is point A and point B. Before point A, the Bitcoin cash market can be seen to be moving in an upwards direction all the way to around $350. This increase in price has been due to an increase in the number of miners in the Bitcoin cash network thus resulting to an increase in its demand. This result to an increase in the number of buyers buying it thus causing it to continue going upwards all the way to $278 as indicated above. Some miners then dump their earned Bitcoin cash in several exchanges thus causing its demand to slightly decline. Because of this , the price again slightly decline to point A at around $272. More number of miners continue to join the Bitcoin cash network thus causing its demand to increase again thus its price rises again to point B at above $278. In one year time, if more number of miners will continue joining the Bitcoin cash network to lease their computing power to be used to secure the Bitcoin cash network as well as to validate transactions taking place on the Bitcoin cash network, then there is possibility of the demand for Bitcoin cash to continue increasing which can further cause the movement to continue trending upwards all the way to around $400. As an investor, this is the right time to buy Bitcoin cash since there is possibility of this to happen since I am bullish on Bitcoin cash

  2. Bearish Bitcoin cash price analysis based on consensus used

In a besrish market, the bitcoin cash will be moving in a downwards direction. In late 2017 when Bitcoin cash came to be as a result of the hard-fork of Bitcoin, one Bitcoin cash was going for around $0.3. Within 24 hours, the price went up all the way to around $1000. This increase in price was due to an increase in the number of miners beginning to mine Bitcoin cash by that time. The price then dropped to around $700. This decrease in price again was due to miners dumping their airdropped Bitcoin cash by that time together with their mined Bitcoin cash. Three years later, the price of one Bitcoin cash has dropped to around $350 and is currently trading at around there. The mining reward of Bitcoin cash keeps of halving after every four years. The first halving is likely to take place towards the end of 2021. By that time, the reward per block will also decline. Therefore we can say that if the number of miners for Bitcoin cash will have decreased towards the beginning of 2021, then the demand for Bitcoin cash will also decrease thus causing its price to also decrease. Here is the chart showing the price prediction of Bitcoin cash by the end of 2020;

351665157-96df8f18c2e99360efb26b180e570caeb8114e54a657cbdd48c52cf1e836eb22.png
The above is the Bitcoin cash market in terms of USDT. Two points are being indicated. There is point A and point B. Before point A, the Bitcoin cash market can be seen to be moving in a downwards direction all the way to around $272. This decrease in price has been due to a decrease in the number of miners in the Bitcoin cash network thus resulting to a decrease in its demand. This result to a decrease in the number of buyers buying it thus causing it to continue going downwards all the way to $272 as indicated above. New miners joining the Bitcoin cash network then purchase some Bitcoin cash so that they use them to buy some computing power. Because of this , the price again slightly increased to point A at around $278. More number of miners continue to leave the Bitcoin cash network due to a decrease in its reward thus causing its demand to decrease again thus its price falls again to point B at below $272. In one year time, if more number of miners will continue leaving the Bitcoin cash network due to a decrease in its reward ,then there is possibility of the demand for Bitcoin cash to continue further declining which can further cause the movement to continue trending downwards all the way to around $200 though I am not bearish for Bitcoin cash. As an investor, this is the right time to sell Bitcoin cash if you think this can happen although I am not bearish for Bitcoin cash.  

Summary
In late 2017, the Bitcoin network experienced a hard-fork which resulted to Bitcoin cash network. During that time, the users who were holding some amount of Bitcoin were airdropped the same amount of Bitcoin cash to their account. During that time, one Bitcoin cash was going for around $200 but the price managed to rise to around $3700 within 4 months. 3 years later, the price is trading at around $280. The increase in price was due to an increase in the number of miners while the decrease in price again was due to the miners dumping their earned and airdropped Bitcoin cash to several exchanges . Therefore, we can say that when the number of miners for Bitcoin cash are increasing, then the
demand for Bitcoin cash will also increase thus causing its price to also increase. On the other hand, when the number of miners are decreasing due to a decrease in it's mining reward, then the demand for Bitcoin cash will also decrease thus resulting to a decrease in its price.  

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quintomudigo
quintomudigo

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Teacher Forex School.


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