Data show that in April 2020, BCH will take the lead in halving block rewards, and BTC is expected to usher in half in May, which has become a major concern for BCH users and even BTC users at this stage. Some people believe that this may lead to a significant decline in the income of miners, while others believe that prices will rise rapidly to make up for the impact of reduced block rewards.
Mining perspective
Regarding the impact of halving on prices, the views among mining leaders are the same. The halving may lead to a skyrocketing price, which can even skyrocket several times. Only in this way can miners continue to be profitable and continue to invest in computing power. Hyperblock CEO Sean Walsh commented: "If you look at the first 6 months and the last 6 months of the first two halvings, you will see a sharp increase in the price of Bitcoin. As a miner, (halving) means Your income will be halved overnight, which is a bit scary, but the rise in the price of the currency is enough to make up for our losses.
Each time the halving triggered a bull market. In simple terms, it is "things that are scarce are expensive" and prices have skyrocketed. Only in this way can we continue to attract computing power and continue to invest in the BCH network. If the rate of increase is high enough, not only will the computing power and miners of the BCH network not decrease, it will also attract more computing power to join the BCH network. And because BCH first halved, it was the first to enter the price bonus period, and it may even suck back BTC computing power. Profit-seeking miners may switch computing power to the BCH network because of profitability.
Why should the block reward be halved?
Each time a new block is generated, the miner mining the block will get a certain amount of bitcoin reward. But every 210,000 blocks, the number of block rewards will be automatically halved by the system, so it is called halving. The mechanism was created by Satoshi Nakamoto to set a supply cap and make Bitcoin more scarce, as the total will never exceed 21 million. In contrast to most fiat currencies which lose value over time due to inflation, the halving model is the opposite, which puts upward pressure on prices.
The first halving took place in 2012, when the block reward was initially set to 50 to 25. The second and last halving took place in 2016, when the block reward dropped from 25 to just 12.5. The upcoming BCH halving is expected to be in April 2020. After this happens, BCH miners will lose half of the current block reward (12.5 BCH), and each block will only receive 6.25 BCH and handling fees. It is expected that the BTC halving will be after May 2020.
After halving, BCH becomes more dependent on fees.
As time passes, all BCHs will be mined. At that time, there will be no block rewards for new blocks. In fact, since 20 years after its birth, block rewards have basically been reduced to neglect. So what about miners? Obviously, the miner needs enough income to maintain the mining cost. Without the block reward, the miner has only one way left. In fact, this is also the original prediction of Satoshi Nakamoto. He predicted that "Bitcoin will either die or have a large transaction volume in 20 years". Only a large enough transaction volume can maintain the mining cost of miners.
This is also the fundamental reason why BCH has been committed to making the best money in the world. BCH can rely on sufficiently excellent payment attributes and transaction capabilities to attract users to use it. Judging from the current payment capacity of BCH, the activity of BCH on the chain has been rising.
Australian BCH accounts for 90% of payments
The payment advantage of BCH has been initially highlighted. Using data from TravelbyBit and HULA, we can view the total consumption and transaction count of each cryptocurrency in Australia.
Summary
In April 2020 , BCH welcomes the most important nodes since its birth,let us continue to pay attention to the performance of BCH.
If the new supply goes down, the value more likely goes up.