Unlike BCH and BSV, Bitcoin Hash Rate Remains Strong Post-Halving

LongHash Blockchain Information (ID: Kyle Torpey)

LongHash Blockchain Information (ID: Kyle Torpey)

, Author: Nick Chong, reproduced by Odaily with authorization.

At 7:23 pm UTC on May 11th, when the 630,000th BTC block was mined, Bitcoin experienced the third block reward halving.

A halving is an event in which the rewards that cryptocurrency miners receive for validating blocks, or “mining” (or processing transactions), are reduced by 50%. Bitcoin halving occurs about every 4 years, and the halving that just happened is the third halving event since Satoshi Nakamoto proposed the concept of Bitcoin in 2008.

Bitcoin isn't the only cryptocurrency that has undergone a halving recently. Rival networks Bitcoin Cash ( BCH ) and Satoshi Vision ( BSV ) — “hard forks” or derivatives of the original Bitcoin blockchain — completed their respective halving events over the course of two days in April.

After their respective halving events, both networks saw significant drops in their hash rate — the amount of computing power allocated to mining, as measured in hashes. The halving forced miners with tight profit margins to shut down or allocate computing power to other blockchain networks or tasks, thus triggering a drop in hash rate.

In the 14 hours following BSV’s halving, the network’s hash rate dropped by roughly 60%, from 3.06 exahashes per second to 1.23 exahashes per second, Longhash reported at the time. Similarly, BCH’s hash rate also dropped by more than 80% within 24 hours of the halving.

As LongHash contributor Kyle Torpey predicted in April 2019, this drop threatens the security of the blockchain network. Crypto51.app has predicted that the cost of launching a "51% attack" on the Bitcoin network for one hour will be 14,400% higher than the cost of attacking the Bitcoin Cash network for one hour.

Unlike the above two, Bitcoin's hash rate has performed surprisingly well after the halving occurred. Data from cryptocurrency mining site CoinWarz shows that as of 2:16 a.m. UTC on May 12, seven hours after the halving, the bitcoin blockchain's hash rate had only dropped from 130.47 exahashes per second to 122.64 exahashes per second.

Although there has been a 6.01% drop, this figure is still far from the above-mentioned sharp drop in the hash rate of the Bitcoin fork network. To corroborate this, we looked at Blockchain.com's weekly Bitcoin average hash rate, which currently stands at 120 exahashes per second, which means that this drop actually brought Bitcoin's hash rate back to the "average" value of the past week. ".

The resilience currently exhibited by Bitcoin miners may be related to the high transaction fees charged by Bitcoin traders.

CoinDesk analyst Zack Voell noted on Twitter that transaction fees currently make up 15 percent of miners’ mining rewards. This part of the transaction fees received by miners may partially offset the concerns about the profitability of miners caused by the halving of BCH and BSV. Due to the limitation of transaction processing capacity, the transaction fee market of BCH and BSV will be much smaller.

Hedge fund manager and Blockware Mining CEO Matt D'Souza explained after the halving that Bitcoin miners are facing "extremely high risk of shutdown." He believes that, according to his company, roughly 30% of the hashrate currently on the network comes from miners that are running at breakeven prices.

LongHash, Use data to understand the blockchain.