Bitcoin Cash network activity is expected to continue falling after halving
Bitcoin Cash (BCH) is facing a death spiral and the worst part is the crypto community’s total lack of concern for what lies ahead in the future. After the amazing BCH halving event in block # 630,000 extracted by Antpool at 12.00 UTC, the block’s reward for miners was cut in half (from 12.5 BCH to 6.25 BCH), leading to a mass exodus of miners for other profitable currencies, such as Bitcoin (BTC) and Bitcoin SV (BSV).
Image by: Bitcoin.com
After halving, the first block appeared two hours later – normal confirmations take 10 minutes – signaling the spiral of miners’ deaths or a move to other profitable currencies. At the time of writing, only 23 blocks were extracted in the last 10 hours with the last more than 1 hour ago.
The disparity in the time required for a block to be mined in the BCH network since halving (Image: Blockchain.com)
Currently, Bitcoin is almost 80% more profitable to mine than BCH and miners must switch to BTC – since they both use the SHA256 algorithm – which makes the blockchain susceptible to a 51% hack.
However, the window for this attack is set between now and Friday, 10, when BSV will also perform a halving. However, a solution for BCH is in its “parent blockchain”, when halving occurs in May this year.
“Halving can be catastrophic for BCH”
Although halving reduces the rate of supply of PoW tokens, such as BTC, BSV and BCH, mining revenues are also effectively reduced by half, as the block subsidy holds more than 90% of mining revenues.
The exodus of miners leaves the security of the network exposed and a 51% attack becomes easier. According to crypto analyst Dan Held, also a Kraken FX BD, halving can be “catastrophic for Bitcoin Cash”.
In a tweet sent on Wednesday, Dan explained a possible “doomsday scenario for Bitcoin Cash”, stating that the chain is rolling as miners leave for BSV and BTC:
Halving can be catastrophic for Bcash.
Bcash halvening occurs first> blocks have halved subsidies> miners switch to Bitcoin (since they share the same hash thing)> security spending becomes dangerously low> 51% attacks become very easy
BTC / BSV on the front line by BCH?
Bitcoin may be the likely superhero for your fork. First of all, it is crucial to understand that the 51% attack on the BCH will require a considerable amount of money to hack into the platform – about $ 18,000 an hour in attack costs. However, all of this is made obsolete, as it would be simpler and cheaper to extract the BTC instead of attacking the BCH.
“[1/2] In general, as the BTC is priced higher than the BCH BSV, the proportional size of the hashrate oscillations in the BTC should be smaller and the network should be more stable
However, due to the different difficulty setting, BTC takes longer to correct. ” – explained a Tweet by BitMEX Research.
The rational miners will switch to BTC and BSV, meaning that the two blockchains expect an increase in the hash rate in the coming days. However, after Friday (when BSV halving occurs) and BTC halving, BCH can see the pre-halving reality back.