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Interesting Separate Halvings for Bitcoin, BCH, BSV

The Bitcoin Cash (BCH) block reward halving is in four days (ETA date: 8 Apr 2020 at 11:46 UTC) while Bitcoin SV (BSV) is expected to have its halving two days later. These reported schedules leave both forks of Bitcoin with about five weeks short of Bitcoin halving (ETA date: 13 May 2020 at 20:00 UTC) even though they all share the same proof of work (SHA-256) algorithm.

It will be the first time these split coins will undergo a halving and rather than halve their block rewards at the same time as the Bitcoin protocol demands to make for deflation by decreasing the issuance of new supply over time thus becoming scarcer, it is not the case. Hence the pending events hint at an unprecedented outlook which could question their scarcity properties, their perceived centralized control and a possible change in their ledger and monetary policy.

The combined hashpower of both BCH and BSV is insignificant compared to Bitcoin’s and may not be indicative of what is to come with the Bitcoin halving. However, what would become of the hashrate from these chains whose halvings are set to occur at the same time as Bitcoin’s difficulty adjustment is worth a watch. It begs the question of why miners would continue to mine them when they can switch back to Bitcoin which seems a possibility but not likely going to happen.

“In my view, the halving will result in an uptick in the number of miners and business supporting Bitcoin SV, because it is the only network that has been prepared for this all along,” says Jimmy Nguyen, a staunch BSV advocate who is also the Bitcoin Association President. “The driving force behind the ‘Satoshi Vision’ is to massively scale with bigger blocks. Satoshi designed Bitcoin with the intention of miners becoming less reliant on the block reward subsidy over time, with revenue instead being increasingly derived from transactions fees – with bigger blocks supporting higher volumes of transactions as the network matured. But of the competing Bitcoin chains, Bitcoin SV is the only one that provides the platform capable of realizing this.”

Nguyen is of the view that after all the Bitcoin networks have undergone their halving, more miners and enterprises “will see that they simply cannot depend on the dwindling subsidy amount earned with each block reward” and the halving “will demonstrate why BSV is correct in following the Satoshi Vision for Bitcoin, instead of making the same mistakes that have plagued BTC – mistakes that have resulted in a slow network, crippled by small blocks and an over-reliance on a quickly diminishing block reward subsidy.”

In the meantime, Bitcoin advocates continue their branding push ahead of the halving event which is expected to cause scarcity – on a stock-to-flow basis – to double from 27 to 54 years. Of great interest is the term ‘Quantitative Hardening (QH)’ coined by the Co-Founder/CEO of Blockstream, Adam Back as a synonym for the halving which is coming at a time when a global pandemic has led several central banks to print more money.

According to Back, QH is meant to be the crypto space’s response to the “lots of politically driven quantitative easing” and “the sound of Bitcoin getting even harder”. When fiat currencies like the US dollar inflate – possibly as a result of too much money in circulation – over time leading to a decrease in their purchasing power, Bitcoin is expected to serve as a hedge against the inflation but this has yet to be proven.

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