For any proof-of-work based cryptocurrency, the halving events are something that is expected to bring some positive price action by reducing supply and increasing the value of the said token. Overall, halvings are highly anticipated events that greatly benefit a cryptocurrency especially in terms of reducing the inflation rate and sustaining the token’s value.
However, this hasn’t been the case with Bitcoin Cash (BCH), one of the most popular forks of Bitcoin. The much-awaited halving has been quite catastrophic for the network security as it looks like miners have fled the scene due to the unprofitability of mining BCH. This has resulted in a massive drop in the cryptocurrency’s hashrate, making the network highly vulnerable to 51% attacks.
As previously reported by The Daily Chain, right after the halving event at block height 630,000, there was a 109-minute time gap between two consecutive blocks. This is ten times the normal block production time of 10 minutes. As a consequence, transactions on the network ground to a halt during that time.
As per data from CoinWarz, the hashrate on the Bitcoin Cash network dropped from 4,200 petahashes per second (PH/s) to as low as 720 PH/s within two days of the halving taking place.
This was the direct consequence of miners giving up on mining BCH due to the unprofitability. The situation is so grave, that if not for some mining pools operating at a loss to maintain the network, the hash rate dedicated to mining BCH would’ve have dropped even further.
Currently, Viabtc is responsible for the majority of the hashing power over the past 24 hours. Other popular mining pools have seen massive drops in hashrate with Antpool dropping 70% and Poolin dropping more than 80% of its hashrate. Hardware manufacturer Bitmain operated mining BTC.com is also sustaining losses.
Even Bitcoin.com, one of the most popular mining pools for the BCH community run by BCH proponent Roger Ver, has seen its hashrate drop more than 90%. Looks like even the former Bitcoin evangelist turned Bitcoin Cash promoter, is finding it hard to keep his mining operations going in the wake of such conditions.
Vulnerable to cheap 51% attacks
The massive dip in hashrate has left BCH unguarded against the threat of a 51% attack, as Zack Voell from Blockstream referred to data from Crypto51 revealing that the costs to execute a one-hour 51% attack on the network had dropped more than 50%.
While the BCH network adjusts its difficulty rate every 24 hours to minimize damages due to dropping hashrates, some crypto commentators believe that this time it won’t be that simple.
Bitcoin community scared
One the other hand, data from Fork.lol reveals that Bitcoin’s hashrate has been on the rise and is up more than 30% over the past 48 hours while BCH has been seeing a steady decline. With the Bitcoin halving now just a month away, some members of the crypto community are speculating that a drop in BTC hashrate post halving could be damaging for bitcoin miners especially because unlike BCH, BTC adjusts its difficulty every 14 days.
One such user on Reddit posted:
“[T]he BTC miners are more f***** than the BCH miners if the hash rate suddenly drops 75% in a single day. BCH adjusts its difficulty every 24 hours. BTC adjusts its difficulty every 14 days. So miners must mine at a loss for a much longer period until the network can operate as normal again (unless there are some last minute panic changes in the difficulty adjustment protocol).”