There has been a lot of hype about the Bitcoin (BTC) halving lately especially since it’s just a month away. However, Bitcoin isn’t the only cryptocurrency with a halving in 2020 as it’s infamous fork Bitcoin Cash, the fifth-largest cryptocurrency has already undergone a block reward halving on April 8. The halving saw BCH block rewards reduced from 12.5 BCH to 6.25 BCH.
The halving problems
Being one of the most pivotal events for any Proof-of-work (PoW) based network, the event can often end up affecting the security of the network as miners often flee due to low profitability. BCH might be facing this issue because right after the halving at block height 630,000, miners took close to two hours before they mined a block.
The massive delay in block production was noted by BitMEX research on twitter as it stated that the time between block 630,000 and 630,001 was roughly two hours where it previously only took ten minutes to generate a BCH block.
At the time of writing, the block production time was normalised back to 10-20 minutes per block.
Furthermore, the BCH hash rate also took a hit as it dropped from 4.36 EH/s to 1.7 EH/s, down close to 60% according to crypto data provider fork.lol. However, the chart on Bitcoin.com showed that the hash rate was on the way up, to 3.5 EH/s. Another data provider Coinwarz show the hash rate dropping from 3.9944 EH/s to 2.4595 EH/s.
Miners fleeing BCH?
An April 1 report published by Arcane research, stated that the BCH hashrate was supposedly at risk of halving along with the cryptocurrency itself as miners might migrate to BTC due to concerns regarding profitability, predicting that “volatile days coming into the halving, and in the immediate aftermath.”
Furthermore, the report adds that a migration of this nature could make the BCH network prone to 51% attacks considering the fact that the hashrate of BCH is incomparable to that of bitcoin.
This isn’t any kind of confirmation that miners are actually switching to the Bitcoin network, but the latest edition of Coin Metric’s State of the Network reports also suggested the same. As per the report, the BCH halving “should force miners to direct even more hash power to Bitcoin as it will still have a 12.5 native unit block reward (instead of 6.25) for about a month longer.”
The price of BCH was up more than 17% throughout the week. Following the halving, BCH price dropped by 3.46% to $264.5 and is still down 1% on the daily with a market cap of $4.2 billion. BCH miners might abandon the network to get better profits, despite the fact that they had previously sustained losses to keep the BCH prices up.
The next BCH halving is set to occur in 2024, but since the BTC halving is at the door, it is yet to be seen whether BCH miners hold the fort or surrender to the heavy expenses of mining BCH right now. BTC on the other hand could see a surge in mining difficulty if new miners join in. Bitcoin SV, another BTC fork, is also expected to halve later this week.