In April, for BCH, there is a big event that has received much attention-BCH is halved. Regarding the upcoming halving, there have been many discussions and predictions regarding this. As for the outcome, BCH will finally give you an answer with its own performance.
What is halving?
First explain what halving is, " the reward for producing each new block is halved ." Like Bitcoin, BCH is obtained through mining machine operations. Miners will receive a certain amount of rewards for the output of blocks. This is also the way each new BCH is born.
Bitcoin is a reward that will be reduced by half for every 210,000 blocks produced, and the mining difficulty is stipulated to be an average of about 10 minutes to dig out a block. Written into the code base. Based on an average block of 10 minutes, we need 4 years to produce 210,000 blocks, that is, every 4 years, the output will be halved.
BCH is set up similarly to Bitcoin, and the reward will be reduced by half for every 210,000th block produced. In theory, the block generation time of BCH and BTC is about 10 minutes, and the halving time should be consistent, but because BCH early adopted an EDA emergency difficulty adjustment algorithm for a period of time, that is, if the BCH blockchain If there are less than 6 blocks mined in an hour, the difficulty is reduced by 20%, which makes the early BCH block generation speed faster than BTC, so the halving time of BTC is later than BCH.
BCH halving time
According to the BCH code setting, every 210,000 blocks of BCH is a cycle, that is, the reward will be reduced by half every 210,000 blocks mined. Therefore, when the BCH starts at the block of 0 209999, the reward for each block dug is 50BCH; then there is a halving, in the 210000 419999 blocks, the reward for each block dug is 25BCH; In the 420,000 629999 blocks, the reward for each block dug is 12.5BCH, in the 630,000 839999 blocks, the reward for each block dug is 6.25BCH ...
The first two halvings of BCH followed Bitcoin, which occurred in November 2012 and July 2016, respectively, and the third halving pass calculation this year is expected to occur around April 8.
BCH halving benefits
Block reward halving means that all BCH takes longer to circulate, but it also means that mining will produce less and less new BCH, and due to its limited supply and increased difficulty in mining, it leads to its scarcity attribute More and more obvious, scarcity will directly enhance the value, as the saying goes, things are rare! For BCH, there is no doubt that this is a very good thing.
In contrast to the fact that most fiat currencies lose value over time due to inflation, the halving model is the opposite. After halving, the annual inflation rate of BCH will also be adjusted directly to 1.80%, which is a significant decline.
BCH halved, what preparation do we need?
In fact, for the halving of BCH, the main thing that BCH supporters do is psychological preparation. Compared with the BCH upgrade, the major nodes are upgraded in time before the upgrade, and the main reason for the halving is the block reward halving. Although we don't need to do anything in advance, we must have a very clear understanding of this matter.
Especially for the miners, with the same computing power, the BCH commission fee obtained from the previous 12.5BCH becomes 6.25BCH. Therefore, some people worry that the BTC has not been halved at this time, and the halving of BCH will cause miners to avoid the loss caused by the halving of BCH earlier than BTC. When BTC and BCH have basically the same increase and decrease, there will be about 50% The BCH computing power is cut to BTC, and the average block time of BCH is greatly lengthened. The output of mining BCH with the same computing power is lower than BTC, resulting in more computing power being cut off, and more computing power being cut away The block time is longer ...
In fact, this worry is superfluous. Because the difficulty adjustment algorithm of BCH is different from BTC. BCH's mining difficulty adjustment algorithm is an improved DAA algorithm. In simple terms, it has the following characteristics:
1. Adjust mining difficulty block by block;
2. The mining difficulty of each block is adjusted based on the computing power of the 144 blocks in front of it;
3. When the computing power changes according to the exponential law, the network will quickly adjust the difficulty to ensure fairness
4. Avoid feedback oscillation caused by the mismatch between the current computing power and the target difficulty.
The above characteristics of the DAA algorithm ensure that even if the computing power drops by 50% instantaneously, it will only affect the BCH block generation speed for a short time. The DAA algorithm can quickly adjust the difficulty according to the actual calculation power and return the block generation time to a normal level.
And a large amount of computing power is withdrawn from BCH. This is a practical case to consider: the most typical example is the "hash power war" when BSV splits. BCH computing power has dropped sharply for several days, and the cumulative decline has exceeded 50%. The average block time of BCH can still be stabilized at about 10 minutes. Facts have proved that in the case of rapid withdrawal of a large amount of computing power, the DAA algorithm can quickly adjust the difficulty according to the actual computing power, so that the average block time is restored and stabilized at about 10 minutes. It can be seen that even if there is a withdrawal of 50% of the computing power, the impact on the BCH block time is short and slight. In addition, BCH has added reorganization protection, that is, 10 block confirmation, and there is no need to worry about 51% attack. For BCH, the halving will go smoothly.
For the developers and eco-builders of BCH, halving the BCH is just a small episode, without too much attention, just quietly waiting for the halving to continue, continue the development and ecological construction of BCH, and use your own power for BCH Contribute. They can attract more users to use BCH through technical improvements and ecological improvements, making BCH more powerful.
Therefore, for investors, the best option is to hold for a long time and wait for the peak.
very well written post. i just added some bch to my portfolio.