AntPool, a mining pool owned by Bitmain, the largest cryptocurrency mining company in the world, announced it would be burning 12% of the commissions obtained by mining Bitcoin Cash blocks.
In a post published on their official Facebook and other social media accounts, the mining group was not very clear about the purpose of the decision to destroy coins in the Bitcoin Cash network. The company said: “Some BITCOIN CASH (BCH) investors may have noticed that Antpool has recently begun burning BCH by sending mining fees to a black hole address with each block mined. Twelve percent of the transaction fees earned by the mining pool are burnt. This is voluntary and we want to explain why this burning might be good for BCH as a whole.
The Bitcoin Cash blockchain is at the tipping point of becoming a widely used public blockchain. A very good example of the innovation happening on BCH is memo.cash. After the May 15th planned hard fork, more and more useful applications will be enabled on BCH, using re-enabled OP_codes and enlarged OP_RETURN spaces. Furthermore, the increased block size cap will prevent the risk of network congestion from deterring such apps to be built.
During the forthcoming wave of innovation, we believe that on-chain transaction volume will experience significant growth. The crypto economy is not only about BCH though, nor is it only about money. It is also about protecting freedom of speech and freedom of association. BCH should embrace innovations and the free market, and be supportive and inviting of all kinds of applications being deployed on the BCH blockchain. The Bitcoin Cash community should embrace the entrepreneurial spirit and treat any fee paying transaction as a customer. Even if those transactions are non-BCH tokens, and even if those transactions are not about the transfer of money.”
It is not easy to determine what is the strategy of AntPool when it comes to Bitcoin Cash. One could deduct that the mining group that arbitrarily decides to burn cryptocurrencies would benefit from it, since it is not a decision on a protocol level.
AntPool provided more information on its official website, saying the intention was to compensate the investors in BCH by generating rentability for them. The company claims the burnt cryptocurrencies are divided with the rest of the BCH network, even though the announcement says they are destroyed and not distributed: “The BCH community’s continued passion is very critical for fostering the growth of the BCH ecosystem. Maximalism is a dangerous idealism which supposes that only one cryptocurrency should exists and flourish and that all other tokens are “scams” or “altcoins.” The community benefits by welcoming the deployment of additional application tokens on the BCH blockchain. If we have an arrangement of sharing the growth in front of the tipping point of on-chain transaction explosion. We call for other miners to join us in burning 12% of the transaction fees collected.”
There are speculations that the enormous quantity of transactions and almost empty blocks generated in the Bitcoin Cash network created a surplus of BCH coins, which is why the executives and big investors in BCH need to reduce the offer of coins to increase the demand by creating a shortage of coins and thus increasing their price.
In this sense, the decision of AntPool to burn the BCH coins is not compatible with the ideals of the decentralization provided by the blockchain technology. It looks like the decisions taken by central banks to emit or destroy money in order to regulate the economy of a particular country. It is a legitimate move though, although against what the executives of Bitcoin Cash are promoting when it comes to the consensus and decentralization of their blockchain network.
Bitcoin Cash is also known as Bcash. The executives of BCH tried to confuse the users when it comes to the legitimacy of their project by making it look like the real Bitcoin project. The developers of Bitcoin share their news on bitcoin.org, while the promoters of Bitcoin Cash use the domain bitcoin.com.