Bitcoin Cash just completed its first-ever block reward halving since forking away from Bitcoin (BTC) back in 2017. However, early signs since the halving show that the network may be in trouble in the coming days as mining speed drops to record levels. Could this offer a glimpse into BTC’s upcoming May halving and the impacts it may cause to the top crypto?
Bitcoin Cash (BCH) successfully competes halving
According to the Bitcoincashhalf.com, an aggregator that keeps track of the halving of BCH signaled the successful completion of the block reward halving once block 630,000 was mined. The total mining revenue per block mined dropped from 12.5 BCH (~$3,287 at current prices) to 6.25 BCH ($1,644).
The halving saw the coin touch its highest price point in almost a month as BCH climbed past the $270 mark. While a number of analysts imagine the lower supply rate would be a catalyst to push the prices higher, BCH/USD has remained quite the same since the halving. The stagnation in price raised several questions on the overall effect of the halving on BCH.
Zach Resnick, the managing partner at Unbound Capital, said the current lack of real impact from the BCH halving on price may be as a result of a number of miners shutting down given the tough economic times across the globe due to Corona Virus. He said,
“Given the current market conditions, this bullish speculative frenzy coming to counteract the halving doesn’t seem likely this time around. Thus, miner revenue will truly halve, leading to many miners becoming unprofitable and shutting down.”
Is BCH mining sustainable?
It seems the miners of BCH have already started packing their miners or focusing them on mining other cryptocurrencies as seen by the current speed of blocks mining.
Bitcoin Cash just underwent its first halving.
At current prices, daily mining revenue will drop from $471,600 to $235,800.
According to Fork Monitor, in the 2 hours since forking, BCH has only mined 1 block, indicating miners may have already left the network. pic.twitter.com/kqEmlVyI4K
— Ryan Watkins (@RyanWatkins_) April 8, 2020
Since the halving happened at around 12.00 UTC, the Bitcoin Cash miners have only completed 17 block mines, with half of those happening in the past hour or so. This signals a huge chunk of the miners may have shut their mining equipment or switched to Bitcoin mining which is much more profitable than BCH at the moment.
Current Bitcoin Block Reward: $90,826.63
Current BCash Block Reward: $1,664.63
BCash Block Reward worth 1.8% of Bitcoin Block Reward.
Note: this does not include transaction fees. Will compare again at Bitcoin halving.
— Peter McCormack (@PeterMcCormack) April 8, 2020
Given both blockchains use the SHA236 algorithm, a move by bitcoin cash miners to Bitcoin’s blockchain, will lead to a rise in its hash rate and a respective drop in Bitcoin Cash’s mining power. It seems the miners have been migrating from the blockchain in the few weeks prior to the halving as Bitcoin Cash’s hash rate dropped to 3.4 Exahashes from 4.9 Exahashes at the start of March.