The highly concerned BTC is about to usher in the third halving on May 12. Once the halving occurs, it means that BTC will also reduce the mining block reward like BCH, that is, from the previous 12.5BTC to 6.25BTC.
The halving of BTC has always been a topic of concern to everyone. Many people will conduct a series of analysis on this. According to the Google Index, the search volume for "halving bitcoin" is close to the highest level in history.
In addition, before the halving, the price of BTC has also risen to a certain extent, and other cryptocurrencies have also experienced varying degrees of increase under its leadership. I believe that the market fluctuations of the past few days have been felt by everyone.
As the legal value of Bitcoin rises, mining Bitcoin may be more profitable than other SHA-256 cryptocurrencies. Therefore, recently, many miners have turned to the BTC blockchain, pushing the computing power to the highest level in history. The transmission speed of the BTC chain per second exceeds 140 exahash (EH / s), which is the highest in history of the network (ATH). This may be that miners want to snatch the final profit cake before halving.
If BTC is halved, BCH may become a beneficiary. As far
as BCH supporters are concerned, the most important thing is how halving BTC will affect BCH. After all, there are many similarities between BCH and BTC, and there is a certain degree of correlation between the two. Below we will do a detailed analysis of this.
BTC's computing power has plummeted, and the computing power has returned to BCH.
Although the current computing power of BTC has temporarily increased, this halving will result in a significant reduction in BTC's computing power. Currently, more than 50% of BTC's computing power is provided by outdated mining hardware, most of which is the popular Antminer S9 from Bitmain. Given that mining difficulties have continued to reach new highs for a long time, these miners have been operating with meager profits.
Halving will eventually make them unprofitable and will have to be permanently closed. Based on the current BTC price of US $ 8,705, an S9 miner earns US $ 2.09 per day. Based on an average electricity cost of 5 cents per kWh, minus $ 1.68 from the income, the miner only gets a profit of $ 0.41. When the halving occurs, revenue will be halved, but electricity bills will remain the same, which means miners spend 64 cents a day to maintain operations. The above calculation has not considered other mining indirect costs other than electricity, so the reality is that 64 cents will be lost every day, which is no longer feasible. These inefficient mining equipment will eventually end up shutting down.
Of course, some people may say that Bitmain has released its latest miner Antminer s17, which can use this new equipment. Yes, this is also an option. The latest miner can increase the hash value of 27 Th / s, but it will also cost $ 600 or more and consume more than 480 w of power than existing miners. . This caused the total cost of mining one bitcoin to rise to $ 7,300 before halving. After halving, if the hash rate continues to increase at the rate of the past three months, the estimated mining cost after halving will be $ 15,100, and if the hash rate remains unchanged, the cost will be $ 12,600. This means that the price of BTC will have to be doubled miraculously, which is obviously unlikely in the short term.
Therefore, this means that after BTC is halved, some miners will have to shut down due to cost issues and cause some of the loss of computing power. There will be a sudden decrease in BTC computing power.
At the same time, in addition to the reduction in overall computing power, part of the computing power will be switched to the same BCH network as the BTC algorithm. When the BTC reward is halved, BCH may be more profitable than BTC under the same computing power, which makes the profit-mining miners will cut the computing power to the BCH network, which will also cause the BCH computing power to appear decline. In the long run, computing power will form a new balance between BCH and BTC.
BTC is congested again, users turn to BCH
The BTC halving will occur at a block height of 630,000, exactly in the middle of the difficulty adjustment period. If the computing power of BTC is reduced by 50%, then at the current difficulty level, about 1008 blocks still need to be mined and then adjusted to reduce the difficulty of adapting to the decline in computing power. Even so, the difficulty change is still limited because it cannot fall more than 25% of its original level or rise more than 400%, so we may have to wait for two difficulty adjustments before we can adjust the block time to 10 minutes again . The block congestion caused by this time will be particularly obvious.
This is different from BCH. Although BCH had a short-term dystocia when it was halved, its DAA algorithm enabled it to quickly return to the normal state of block production, and BTC did not use DAA algorithm. Yes, it is necessary to adjust the difficulty according to the traditional algorithm, so that this process may last for a week or even two weeks.
Once BTC is congested, BTC transactions will be delayed and handling fees will rise. Most BTC users will have to transfer to other cryptocurrencies due to poor user experience. This has led to a decline in BTC's market dominance, while other cryptocurrencies will experience explosive growth.
There is a specific cryptocurrency that will benefit the most from the surge in Bitcoin fees, and that is BCH. To some extent, BCH is another version of Bitcoin. It solves the problem of Bitcoin congestion by increasing the block capacity, and the economic activity on its network is constantly increasing. As BCH is an electronic cash system that has the advantages of being able to create tokens and protect privacy, it will also become a cryptocurrency that makes BTC feel competitive.
In the last major congestion event, the value of BCH reached a quarter of the value of BTC, which is impossible for other cryptocurrencies. Due to its low fees and instant transactions, BCH's merchant adoption rate has surpassed BTC, which is in sharp contrast to the current situation where BTC adoption rate is declining. And with the advantage of on-chain expansion, BCH can facilitate transactions around the world without having to bear heavy pressure-it can easily absorb any users who have fled Bitcoin. These factors all indicate that Bitcoin Cash will be an ideal replacement for Bitcoin's failed BTC version. After the BTC halving event, we are likely to see that BCH will subvert the top position of BTC.
The halving market appears and BTC drives BCH to rise.
For investors or speculators, the ultimate concern is still the price, and they are even speculating whether the price will increase after the halving.
In fact, the market has given us the answer. Just like the increase before BCH halved, BTC has also seen a certain increase in the past few days, and it has led to a slight recovery in the cryptocurrency market. As for whether there will be a rise after the halving, this can only wait for the performance of the market.
However, according to the previous halving process of bitcoin, bitcoin will have a substantial increase at least half a year or a year later, which is the so-called halving market. When the halving market really comes, BCH will inevitably rise significantly under the leadership of BTC.
Of course, this is just a possibility. Perhaps BCH will develop rapidly after BTC is halved and become a kind of existence beyond BTC. Eventually, BCH will lead BTC to rise. As for the future results, let us wait and see.
Thanks for the information