The trick seems to be causing the price of BCH to climb, so maybe it is working?

Creating scarcity in a supply and demand market - it makes prices go up. Simple economics. Sort of like how the United States keeps inflation from running entirely out of control by spending trillions of dollars on stuff that is literally blown to smithereens - blasting hard-earned money into explosions of death and destruction.

OK, enough of my political rant. Back to the topic at hand: Bitcoin Cash is being sent to a "black hole" - an irrecoverable address - never to be seen again. Bitmain, the main company behind Antpool's Bitcoin Cash miners, which hold a significant portion of the world's Bitcoin Cash hashing power, is currently sending 12% of all Bitcoin Cash mining fees to this black hole, resulting in a decrease in supply and thus, an increase in scarcity and, they hope, in demand.

By doing so, you might think they'd be losing a ton of income, but that hasn't really been the case thus far, since the price of Bitcoin Cash has been climbing, at least partly in response to this action. It's not like Bitcoin Cash has suddenly offered something unique and amazing that would prop up the price, so it seems logical that this ploy is working at least somewhat effectively for the time being. Bitcoin Cash hodlers, many of whom are traders who simply have held Bitcoin prior to the contentious fork in 2017, are enjoying the increase in value of their newly constricted coin supply. So the demand can remain stagnant and the price would still increase since the supply is being reduced.

As the supply continues to dwindle, one has to wonder, will other large mining conglomerates join in the burning process? Antpool accounts for about 12% of Bitcoin Cash's hashing power, so it can have somewhat of an impact on the reduction of BCH supply by burning 12% of its mining fees, but it needs more of a concerted effort to actually burn off anywhere near its goal of 12% of all mining fees. Thus, Antpool has been calling out to other mining pools to join in on the burn to further prop up the price.

Here's an idea: Maybe if they can succeed in burning half the supply, the coin will be worth... twice as much? What they should really do is burn almost all of Bitcoin Cash, then the little remaining will be worth WAY more, right? You could have just one million Bitcoin Cash coins remaining and each one would be worth around $20 000! Sweet!

It seems like a bit of a silly tactic - but perception is important. If less savvy traders perceive that Bitcoin Cash is steadily growing in value, it can create a FOMO market effect of pushing up value anyway. What will be interesting to see is whether this actually helps out the market cap of Bitcoin Cash in the longer term. After all, if there are less coins, at a higher price, the market cap may remain the same anyway, in which case, it's all relative and the price hasn't truly changed, except that it is, once again, concentrated into the hands of fewer addresses. This further centralises Bitcoin Cash into less and less addresses with more and more concentrated wealth, which is one of the major criticisms of Bitcoin Cash in the first place, along with the higher concentration of hashing power and far lower distribution of mining nodes compared to Bitcoin.

If you are a Bitcoin Cash hodler, you can at least enjoy the nice climb in value of your Bitcoin Cash holdings over the past little while, but don't be fooled by this tactic.

*This is not professional trading advice - it's just my opinion!

If you're interested in trading cryptocurrencies, check out Binance by using the link in my profile @xsid and sign up today!

source:

https://motherboard.vice.com/en_us/article/wj7a8x/why-is-antpool-bitmain-burning-bitcoin-cash-fee-black-hole

image source:

https://www.videoblocks.com/video/slow-motion-flames-from-bottom-of-screen-vtsfyao