Bitcoin cash (BCH), the cryptocurrency that broke away from bitcoin (BTC) due to community disagreement in 2017, is about to take a big step in the blockchain.
In block 630,000, which is expected to occur on Wednesday morning, Eastern time, the number of BCH coins created approximately every 10 minutes will decrease by half from 12.5 to 6.25. It will be the first halving for BCH in some sort of spectator sport, some on Reddit say they will watch the blockchain unfold.
The event foreshadows the same process that is taking place on a larger scale on the BTC blockchain next month. BCH’s market capitalization is worth around twenty-fifth of BTC.
See also: Bitcoin halved, explained
And if that’s not enough, bitcoin SV (BSV), the cryptocurrency that came out of BCH after another fierce battle, will be cut in half a day or two later.
The halving is considered monumental because it highlights that the coin supply is fixed, a characteristic that differentiates the BTC and its lookalikes from most national currencies. In addition, this is arguably an important variable that has led to price increases for bitcoin in the past.
As such, a Reddit user said he bought beers to “celebrate [the event] with family. “
The halving occurs earlier in the year for BCH and BSV in part because BCH temporarily had a different algorithm dictating how quickly the mining difficulty would adjust, which for some time accelerated the process of creation of blocks.
Chance of attack
This slightly earlier date could have an unintended consequence.
BSV developer Brad Jasper said this week’s denominations will be “bad” for the respective cryptocurrencies in the short term.
Miners are expected to leave temporarily for greener pastures. The main source of income for miners is block rewards, which being cut in half will suddenly cut in half, making the channels less profitable to operate. Meanwhile, BTC bulk rewards don’t halve for about a month.
“When BSV / BCH are cut in half, they will both lose the hash power, likely at BTC,” said Jasper. In the long term, he argued, BSV will prevail because of its “usefulness” as a network that prioritizes the growth of transactions.
Arcane Research, based in Norway, agreed with the loss of computing power section in a report released last week, but went further. If the hash power decreases, said Arcane, the two dissociated cryptocurrencies will be more vulnerable to 51% of attacks, in which malicious actors take control of the network.
But Jasper has said he expects the situation to change quickly once BTC takes its turn and halves next month, as it will no longer be more profitable for mine than its namesake offspring.
That said, not everyone is convinced that the halving milestone will lead to something exciting or out of the ordinary.
Bitcoin.com CEO Roger Ver, initially known as “Bitcoin Jesus” for his evangelism before going to the BCH camp, said halving the BCH would be a “non-event” being given the history of BTC.
“The last two were not events, and I expect this one to be the same as the last two,” he said.
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