Vulnerability on Network Hashrate May Hinder BCH Halving bull
BCH halving does not bring a price pump. If there is no greater breakthrough in price, one-month ahead halving before Bitcoin may cause the loss of computing power from BCH in the short term.
It is expected that at 11:30 (GMT+8) p.m. on April 8, Bitcoin Cash (BCH) will see its first halving after its birth – the reward for the blocking will be reduced from 12.5 BCH to 6.25 BCH.
Wu Jihan, founder of Bitmain and KOL of BCH community, is not optimistic that “halving” can directly pump up the price of BCH. In October last year, he predicted that the bull market and the bear market were both getting longer, and the halving might not start synchronously with the bull market.
The trend of Litecoin halving last year is one of the judgment bases for Wu Jihan. He believes that the speculation about halving stimulated the short-term rise of the currency price, and then suffered a crash. In this process, the capital did not break through the previous high. In addition, as the market value and volume of bitcoin grows as well as the number of users, and the volatility is gradually reduced.
Over the past year, BCH has also fallen into this pattern, hovering between $100 and $500. In the first half of last year, the total market value of BCH still did not break the historical high at the end of 2017 under the catalysis of the IEO boom and the market recovery.
In the days before the halving, it is humored that more and more miners turned from BCH to BTC.
BTC.com’ data shows that by 4:00 p.m. on April 7, BCH network hashrate is 3.28 EH/s, that of BTC is 105.16 EH /s, which is nearly 30 times compared to that of BCH.
Most of the miners aim for profits, they will automatically choose coins with higher profits to mine. These miners pay more attention to the price of the secondary market. Assuming that the price of BCH remains unchanged, BCH halving is about one-month ahead of BTC halving, with less rewards, and the computing power of the period will get half-reduced of the original. After BTC halving, the BCH miners will come back, and BCH network hashrate will gradually recover.
No matter BTC or BCH, on the premise of the same total supply, there will be less incentive after the halving, and the income of miners will depend more on transaction fees. However, BCH has not been adopted on a large scale at present. The transaction volume on the chain is not large, and the transaction fee may not be able to meet the income demand of miners, which will affect the network operation.
“BCH is too small, which may be affected by some unexpected events or even died prematurely. One example is the division of BSV by CSW, which caused the loss of some people in the community that was still in the development stage.”
Said Jiang Zhuoer, the founder of BTC.TOP also mentioned BCH’s current weakness in an interview, In addition, Jiang believes that BCH has not yet formed a closed-loop in some links, such as the income problem of developers and the source of money for developers.
It can be seen that after the halving, BCH will not only face the market test but also the challenges of network development and computing power support.
Strengthen payment scenario and expand smart contracts
In the past two years, the developers of BCH network have been upgrading their network processing efficiency to enhance its most important “payment” experience as a currency. On November 15 and May 15 of each year, BCH will upgrade performance and security, such as code optimization of large blocks and avalanche protocol of “zero confirm 100% security”.
Last May, the upgrade of BCH once again improved the transaction verification speed of BCH. Before that, every transaction initiated by the user will be signed once, which will cause congestion when multiple transactions are initiated at the same time. That upgrade enabled the network to sign multiple transactions at one time, greatly reducing the transaction time.
On November 15, two new consensus protocols were added to BCH network to improve the efficiency of verification and be compatible with batch verification. Another t is a repair program, which makes most transactions on the BCH network tamper-proof and further strengthens the security.
Transaction efficiency and network security are both services for BCH’s ultimate essential “payment” scenario. BCH has gained support in online shopping and offline restaurant consumption. According to the official website, there are now more than 190 merchants accepting BCH payment in the world.
In addition to the payment field, developers have added the SLP (SimpleLedger Protocol) to BCH network to realize the function of smart contract of coin issuance.
At present, there are thousands of tokens issued based on SLP. On March 21, it was reported that Tether will issue USDT on BCH public chain based on SLP protocol, but up to now, there is no BCH version of USDT on the market.
“I hope that BCH can accumulate experience in the first halving, find out its own problems, and correct some defects as soon as possible so that it can be used in more scenarios. Of course, it would be better if there is an obvious recovery in price.”
This is the expectation of Wang Hongli, a member from BCH Chinese community. He hopes that the community will not be affected by the bad environment and reduce the fluctuation of computing power as much as possible after the reward for miners is reduced.