BCH and BSV halvings lead to significant drops in hash rates

On April 8th at 12:19 (UTC), Bitcoin Cash (BCH) block rewards were halved for the first time. According to the code written into the blockchain, when the block height reached 630,000, the mining reward decreased from 12.5 BCH per block to 6.25 BCH. Subsequently, miners quickly abandoned the network.

Miners don't work for nothing. Managing thousands of mining machines costs money, time, and electricity. The consequence of Bitcoin Cash block reward halving is that miners immediately lose 50% of their income, forcing operators to shut down machines due to meager profits, or switch to other networks, such as Bitcoin.

According to the cryptocurrency mining data website CoinWarz, at the moment the halving took place, both the block difficulty and hash rate of the Bitcoin Cash network began to plummet.

The hash rate, which is the computing power allocated to mining blocks, dropped to 785 P (petahashes) per second, an 80% decrease from the peak of 4001.5 P per second on April 8th.

The block difficulty, a dynamic indicator measuring the computational difficulty for miners to process blocks, plummeted to 269 billion, nearly 50% lower than the 528 billion on April 8th.

With both block difficulty and hash rate declining, concerns arise regarding the security of the Bitcoin Cash network—as predicted by Kyle Torpey of LongHash last April.

According to data from Crypto51.app (a website tracking the cost of launching a 51% attack to manipulate or erase blockchain transaction records), as of 16:30 on April 13th Beijing time, attacking the Bitcoin Cash network for one hour would cost only $9,121, equivalent to the price of 41.11 BCH at that time. In comparison, attacking the Bitcoin network during the same period would cost $520,000, which is 57.39 times the cost of attacking Bitcoin Cash. Additionally, attacking the Ethereum network for an hour would cost $85,377, also higher than the cost of attacking Bitcoin Cash.

Crypto51 derives these figures by calculating the cost of renting enough hashing power from NiceHash to control 51% of the network. It is important to note that NiceHash alone does not have enough machines to provide the necessary hashing power to temporarily dominate a major blockchain. However, the data from this website can quantify the security level of a blockchain network.

After launching a 51% attack, the attacker can effectively control the blockchain, making it easy to retract or delete certain transactions. In such a scenario, exchanges or similar service providers are likely to suffer losses, as the attacker can deposit coins into these platforms to gain accounts and credibility, then retract the transaction for double-spending, effectively doubling their money.

On April 10th at 20:48 Beijing time, BSV (Bitcoin SV) also experienced its first halving, reducing the token reward received by miners from 12.5 BSV per block to 6.25 BSV per block—cutting BSV miners' income by 50%.

Miners quickly responded.

24 hours before the BSV halving event, BCH underwent its own halving and exhibited a similar trend, with hash rate plummeting by 80% and difficulty decreasing by 50% at its worst.

Data from BlockChair indicates that since the halving, as of 16:30 on April 13th Beijing time, BSV's hash rate dropped from 3.06 exahashes/s to 1.83 exahashes/s, a decline of approximately 40%. Hash rate measures the mining power allocated to the network through hash values.

This is reflected in the network difficulty, or the difficulty miners face in processing blocks on the blockchain. According to Satoshi.io, the network difficulty dropped from 420 x 109 to 212 x 109.

It is worth noting that within 15 hours after the halving, only 35 BSV blocks were mined, 55 fewer than the normal number of blocks that should be mined during the same period. Since the blockchain uses network difficulty to ensure an average of 6 blocks are mined per hour, it should continue to dynamically adjust the difficulty to ensure timely processing of transactions.

The simultaneous decline in hash rate, difficulty, and block time is related to miners' profitability.

This halving led to a 50% direct income reduction for miners operating on the BSV chain, forcing operators with slim profits to shut down or switch to mining on other networks. A decrease in mining machines means fewer computers processing blocks, ultimately leading to slower transaction speeds.

With the drop in BSV price, the current price of the coin is nearly $40 lower than BCH, and both networks' security has rebounded after significant hash rate reductions.

Despite the rebound, the security of both chains is much lower than it was two days ago. Meanwhile, at least according to CoinWarz, Bitcoin's hash rate has increased, indicating that the Bitcoin fork event has pushed miners toward other more profitable blockchains. In this scenario, other blockchains specifically refer to the Bitcoin blockchain.

This article is from our partner LONGHASH

Further Reading

• Advancing in the Derivatives Market! Binance Officially Enters the Options Market, Allowing Bitcoin Options Trading on its App
• Cash Is King? After Countries Rush to Inject Money into the Market, Bitcoin Trading and Use Cases Have Seen Significant Increases

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