The quadrennial block advantage halving for Bitcoin Cash (BCH) has come up and gone, with miner rewards dropping from 12.5 BCH to 6.25 BCH. The event marked a pivotal moment for the fifth-ranked cryptocurrency by market capitalization, as it was its first l% block reward reduction since emerging every bit a hard fork of Bitcoin (BTC) back in 2022.

The Bitcoin Greenbacks chain experienced another split up that led to the cosmos of Bitcoin Satoshi Vision (BSV) in late 2022. The chain of events leading to the BCH blockchain split acquired a pour of network problems, as the hash war between both factions almost led to a mining death spiral on the Bitcoin blockchain.

BSV'southward halving event is coming upward in less than a twenty-four hours, and Bitcoin's halving will come in mid-May. The halving for both BCH and BSV is happening before than BTC'due south because Bitcoin Greenbacks temporarily used a dissimilar algorithm to adjust its mining difficulty back in 2022, thus speeding up the block creation time.

In that location are several analyses of halvings, as it occupies an important position in the bull cycle for BTC, with Bitcoin'south toll setting a new all-time high inside a year after the previous 50% reduction in the block reward.

Halving, a summary

Approximately every four years — more specifically, after 210,000 blocks have been mined — the cake reward earned by miners on the BCH, BTC or BSV chains reduces past l%. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, coded the halving as an inflation-command measure in the blockchain protocol.

Together with the finite supply of 21 million "coins," the halving constitutes the basic rules of the Bitcoin protocol — and by extension, those of forks like Bitcoin Cash and Bitcoin SV. The periodic aggrandizement drib slows down the supply of new coins, thus preventing the emergence of an inflationary-skewed supply-need dynamic. Without the halving, miners could, in theory, learn all of the cake rewards, likely causing the price to crash.

Indeed, the halving and hard cap prepare by Nakamoto was in response to the inflationary nature of fiat currencies. Central banking concern practices similar quantitative easing and indiscriminate printing of currency unremarkably serve to devalue national currencies. The scarcity created past the halving process echoes the dynamics of aureate mining. World'southward own supply of the precious metal is finite, and each extraction from the crust makes it fifty-fifty more difficult to larn the remainder.

BCH halving 2022: A commentary

At 12:19 p.one thousand. (UTC) on Wednesday, Apr 8, 2022, Bitcoin Greenbacks saw the product of its 630,000th cake, triggering a halving of its miner reward. Bitmain-endemic Antpool was the winning mining puddle for the milestone block.

In the hours leading upward to the halving, BCH stakeholders like Roger Ver of Bitcoin.com, Bitmain boss Jihan Wu, and major Chinese crypto miner and BTC.TOP CEO Jiang Zhuoer appeared in a livestream session to hash out the future of Bitcoin Greenbacks. When asked about the possibility of the halving being "priced in" and thus not having a significant impact on BCH price action, Zhuoer remarked:

"Why does 'price in' theory fail? That's because the crypto users are expanding every bit Bitcoin continues developing rapidly. Many users coming to the market in the next two years take non joined the customs yet. Thus, the 'cost in'' theory is not applicable without the majority of time to come users in the market."

As previously reported by Cointelegraph, the determination of the halving saw the BCH blockchain endure stagnation with the next block — i.e., 630,001 — as it took almost ii hours to emerge. While Bitcoin Cash tin can handle near 116 transactions per 2d, this rate barbarous to just ane.11 TPS.

Equally of press time, data from blockchain explorer Blockchair shows the BCH transaction rate falling even further — to 0.34 TPS — indicating the continued slowdown of economical activity on the network. The average block time has, however, reduced from 100 minutes to 18 minutes.

In the hours leading up to the halving, BCH did gain about 11%, temporarily topping out at $280. All the same, the event did little to sustain the upward momentum, with Bitcoin Cash down by five% in the last 24 hours.

BCH toll trend over the past 3 days. Source: Coin360.com

Commenting on the halving event itself, George Donnelly, the business concern development manager at Bitcoin ABC, revealed that it was nonetheless too early to come across the bigger picture that would emerge following the cake reward reduction. Donnelly told Cointelegraph:

"The kickoff halving, post the Bitcoin Cash fork, was a bang-up success. But the event is nevertheless unfolding. We lost some hash rate for the moment, but it may return soon. The larger trend has yet to reveal itself. Lesser line, BCH blocks are notwithstanding beingness produced and the halving may turn out to be substantially a non-effect. This is, in reality, little dissimilar than the BCH price drib final calendar month, which we at present run across recovering."

Miner exodus amid failing profitability

Before the halving, a lot of commentaries dwelled on the likely response of BCH miners post-obit the block reward reduction. Some pundits had predicted that mining nodes would move their hashing potential away from Bitcoin Cash in favor of BTC and BSV, all 3 of which share the same mining algorithm.

Back in March, crypto analytics platform Coin Metrics issued a study arguing that the upcoming halvings for both networks would forcefulness miners to migrate to the BTC chain. In a private notation to Cointelegraph, Alejandro de la Torre, vice-president of crypto mining pool Poolin espoused similar sentiments, predicting:

"I do wait some miners to leave Bitcoin Cash, yeah. Since BCH shares the same algorithm as Bitcoin and Bitcoin SV, miners can switch to mine these other bondage where the reward has yet to halve."

Indeed, miners accept been known to oft make this migration largely driven by economic considerations, with computing ability being dedicated to the nearly profitable chain. A significant exodus of miners can negatively impact the security of the blockchain and thus arrive susceptible to a 51% assault.

Such a hostile upshot may take place after a significant amount of this hashing power leaves the blockchain, making it possible for rogue actors to gain control of more than than 50% of the mining power, which would allow them to double-spend tokens, roll back the ledger and even prevent the confirmation of new transactions.

According to information from Fork.lol, the mining profitability for BCH dropped to 50% that of BTC immediately post-obit the halving. While the profitability plunged, mining difficulty remained about unchanged, as nodes seemingly acted equally expected by moving resources to BSV and BTC. Joe Nemelka, a information analyst at blockchain analytics platform CryptoQuant, confirmed the miner exodus from the BCH chain:

"Yeah, it looks like miners take left BCH for other chains. Miners are profit seeking, and and so even if miners are committed to BCH, it makes more sense in this example to mine BTC and then merchandise information technology for BCH."

Every bit of press time, the BCH cake difficulty has taken a xvi% downward plunge to business relationship for the hash rate driblet. In a conversation with Cointelegraph, Chun Wang, co-founder and managing partner at crypto mining puddle F2Pool, remarked:

"Most BCH and BSV miners mine these coins when the BCH/BSV mining acquirement is greater than BTC. Earlier the BCH halving on April 8, the mining revenue for these three coins was around $0.12 per Th per day. Immediately later on the halving, BCH acquirement dropped to $0.06, and at present it's at $0.08. Unlike BTC, the difficulty of BCH adjusts after every cake, based on a moving window of the last 144 blocks, to ensure a new BCH block to exist generated every x minutes on average."

Crypto socialism as a temporary palliative

According to Wang, the only exception to the trend would be miners willing to continue on the BCH chain despite the unfavorable opportunity toll. Indeed, Bitmain-endemic Antpool and BTC.com mining pools have been responsible for a large percentage of the mining activity on BCH since the halving.

Jihan Wu's Bitcoin Greenbacks gamble back in 2022 reportedly contributed to Bitmain's revenue woes, leading to a series of administrative upheavals at the Bitcoin mining giant. Wu has since returned to the company, albeit under controversial circumstances, with fellow co-founder Micree Zhan now ousted.

With Bitmain's mining pools still responsible for most of the block mining since the halving, it appears that Wu is doubling downward on BCH. This seemingly irrational mining strategy — which some pundits are calling a course of crypto socialism — might be necessary to forbid far-reaching network instability. For Wang, the upcoming BSV and BTC halvings will determine how miners volition classify their hashing potential amidst all iii chains. According to the F2Pool co-founder, "We would expect that nearly hash charge per unit will go on to leave the BCH chain until the daily mining revenue per TH reaches a similar value as BTC."

Should the price of Bitcoin Cash experience a sharp decline in the coming days and weeks, reducing the BCH to BTC ratio, the unfavorable opportunity toll for BCH miners will get fifty-fifty more negative. Nodes that elected to not jump ship might be forced to abandon such irrational mining, especially when operational costs brainstorm to increase exponentially.

What next for BCH?

For its proponents like Roger Ver, BCH is the embodiment of the ethos laid downwards by Nakamoto in the Bitcoin white paper because it functions every bit "peer-to-peer electronic cash," and Wednesday'south halving marks a landmark moment for BCH: its get-go halving since the 2022 fork.

A slow down in on-chain economic activity where transaction count stays below 1 TPS for at least some time does not assist to bolster the appeal of BCH every bit a currency for retail adoption in microtransactions. However, the block reward halving is nigh to brand BCH a picayune scarcer, peculiarly given the fact that half dozen million coins — nigh 32% of the circulating supply — have never moved. For Donnelly, the halving is bullish for BCH, as he told Cointelegraph:

"The reduction in the block reward means there will exist less new BCH emitted from now on. This is bullish, as the aforementioned need chases a smaller ongoing liquid supply. It strikes a stark contrast with the unlimited quantitative easing nosotros're seeing from developed world central banks. We are focused on standing to abound Bitcoin Greenbacks use and utility."

While BCH proponents might remain upbeat, the halving appears to take left the network worse for wear. Co-ordinate to Crypto51.app, a platform that tracks the theoretical cost of a one-hr 51% attack on proof-of-work blockchains such as BCH, a rogue actor would only need $5,628 (equally of press time) to attack Bitcoin Cash. Earlier on Th, April 9, the theoretical cost stood at $7,500. Back on March 10, information technology was over $21,600.

Commenting on the electric current security status of the Bitcoin Greenbacks network, crypto podcast host and BCH proponent Collin Enstad told Cointelegraph: "The BCH community itself acknowledges this reduction in security. Miners are profit driven, and then of course some of this hashpower will get into BTC or BSV until their halvening happens." However, Enstad is not worried about a 51% assail, as miner migration is a common theme across the three blockchains, adding:

"During the BSV split, also known as the 'hashwar,' many miners moved their hash over to the BCH chain in order to 'out-hash' the BSV chain. They did this at a loss, to ensure the integrity of the chain. Because of this, I take no dubiousness that many miners would do the aforementioned if a 51% assail was detected on the network."