In case you forgot, Bitcoin Cash (BCH) is going through its first halving today.
The crypto community is preparing for one of the most important events that occur once every four years – halving. After the 630,000 block, the Bitcoin miners’ reward will be reduced from 12.5 to 6.25. The resulting scarcity is expected to drive prices to new highs.
The main forks of Bitcoin, BCH and BSV will start earlier. Bitcoin Cash will reduce the reward today. At the time of this writing, 629,999 have been mined to date.
The price of BCH earlier today went up by 12%, soon afterwards it fell but continues to gain 4.99% in the last 24 hours, to $ 264, according to data from Coinmarketcap. The BCH / BTC ratio is also increasing, reaching the highest level since 7 March. While halving is likely to affect the supply / demand ratio in the Roger Ver cryptocurrency, about a third of BCH coins have not been moved since the fork, which makes it scarcer than previously thought, at least for now.
Craig Wright’s BSV will experience his halving tomorrow or Thursday. However, the currency is performing even better than the BCH at the moment, as it has risen 13% in the past 24 hours, making it the second best performance among the top 100 currencies. BSV is now trading at $ 213.
The halving of BCH and BSV is happening earlier than in BTC, because BCH had a different blockchain algorithm at one point, which lessened the mining difficulty. BSV forked BCH in November 2018. Some analysts say halving will be a disaster for BCH, suggesting that many will migrate to Bitcoin.
BCH can suffer from his halving
After halving Bitcoin Cash, miners will receive only 6.25 BCH per confirmed block (instead of 12.5 BCH).
In November, Kraken’s business development director, Dan Hedl, predicted that this event would be “catastrophic” for BCH. The 50% drop in reward per block is expected to have a huge cost on the security of the BCH network. Ultimately, this could result in a feared 51% attack, which would allow control of the network.
Many miners are concentrating their computing power on the most profitable chains. At the moment, BCH is supported not only because of its fundamentals, but because it is interesting in economic terms.
By decreasing the profitability of the BCH (before the BTC), there may be a decrease in the hashing power that will migrate to the BTC. BTC will remain more profitable until May, the month of its halving.
The BCH hashrate is very low compared to the total power of the SHA256 ASICs available worldwide. Any reduction can subject you to the risk of a 51% attack.
If now only 3% of the net is sufficient to attack the BCH, after halving, it may be 1.5%.
The reason why BCH has not been attacked so far is very simple: the network of miners considers the survival of the project to be fundamental and, with it, that of BSV.
The two chains represent a defense against the scaling model defined by the BTC developers.
Mining companies do not intend to hinder the development and maintenance of projects that, through an increase in the size of the block, propose a sizing model that is more in line with what was foreseen in the Satoshi Nakamoto whitepaper.