BCH production reduction is imminent, and the short board of computing power is prominent

It is expected that at 11:30 p.m. on April 8, Beijing time, Bitcoin Cash (BCH) will usher in the first production halving after its birth - the rewards miners get for producing blocks will drop from 12.5 BCH to 6.25 BCH.

At 19:30 on April 7th, with 28 hours left before the estimated production reduction time, BCH temporarily reported at $271, a 24-hour increase of 7%.

BTC’s 7,000 USD level drove the entire cryptocurrency market back to blood, and also brought a good market foreshadowing for the reduction of BCH network production. However, among the top ten assets in the cryptocurrency market capitalization, the short-term 7% increase of BCH is not the highest.

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On April 7th, the two major community opinion leaders of BCH and BSV began to warm up for the "reward reduction" of these two forked networks.

At 11:30 p.m. on April 8th, the BCH network will usher in the first production cut after independence—miner rewards will be reduced from 12.5BCH to 6.25BCH. After 3 days, the BSV network will also experience the same production halving.

In the past two days, the recovery of the market from the "3.12" crash has paved the way for a good opportunity for BCH to reduce production. On April 6, BTC rose back above $7,000, and BCH also rose from $230 to $259 within 24 hours, an increase of 11.7%.

At 7:30 last night, BCH temporarily reported at $260, a 7% increase in 24 hours. This increase is not high among the top ten encrypted assets by market value. During the same period, the 24-hour increase of ETH was 12%.

The current production reduction did not bring more upward momentum to BCH, and the benefits of halving have been released earlier.

After the beginning of this year, in addition to the BTC genealogy, the prices of a number of "halved coins" such as DASH and ETC are all rising. BTC has risen from $6,950 to $10,500; ETC has risen from $4.1 to $13.2; BSV is the most exaggerated. From $92 to $455. Unwilling, BCH started an upward trend from a low of $195 on January 2 to a high of $500 on February 14.

At that time, there was a voice in the market that "the halving and rising market has started." No one ever thought that the spread of the new coronavirus epidemic has become a "black swan", the global financial market has been hit, and cryptocurrency has not been spared. On the afternoon of March 12, a waterfall came suddenly. The next day, BTC fell to a minimum of 3,800 US dollars, and BCH also fell to the bottom. The low of 129 US dollars reproduced the bear market at the end of 2018.

The halving can no longer whet the appetite of investors.

Wu Jihan, the founder of Bitmain and a recognized opinion leader in the BCH community, is not optimistic that the "halving" will directly drive the currency price up. In October last year, he predicted that both the bull market and the bear market are getting longer, and the halving and the bull market may not start at the same time.

The trend of Litecoin, which was halved in advance last year, is one of the basis for Wu Jihan’s judgment. He believes that the hype for the halving stimulated a short-term rise in the price of the currency, and then suffered a violent crash. During this process, the funds did not break through the previous high. . In addition, with the expansion of Bitcoin's market value and volume, the user population is also expanding, and the volatility is gradually decreasing.

In the past year, BCH has also fallen into this pattern, hovering between $100 and $500. In the first half of last year, under the catalysis of the IEO boom, the cryptocurrency market recovered, but the total market value still did not break through the historical high at the end of 2017.

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Comparison of BTC and BCH price trends

BCH, which has left the Bitcoin community, has not gone out of the ups and downs of the "coin king", and the overall downward trend is more obvious. At present, no cryptocurrency can create another prosperous world, not to mention the halving of BCH and BSV, and the expectation of BTC's production reduction has also become gloomy amid waves of hype and the last round of sharp decline.

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In the days before the halving, there were news in the market that miners switched from BCH to mining BTC.

The media Bitcoinist reported that many miners began to switch from BCH to mining BTC, and the loss of miners will have an impact on the BCH network.

According to BTC.com, as of 4:00 p.m. on April 7, BCH’s network-wide computing power is 3.28 EH/s, while BTC’s is 105.16 EH/s. BTC’s computing power is nearly 30 times that of BCH.

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BCH computing power fluctuation trend since this year

Yang Haipo, the founder of CoinEx&ViaBTC, told Honeycomb Finance that the vast majority of miners are mining for profit, especially in machine gun pools with concentrated computing power. They will automatically choose coins with higher profits to mine. These miners pay more attention to the price in the secondary market. Assuming that the price of BCH remains unchanged, BCH will be halved about one month earlier than BTC, and the reward will be reduced, and the computing power will be reduced to about half of the original during the period. When the BTC halving is completed, the miners who dig BCH will also come back, and the computing power level will gradually recover.

However, he also pointed out that after the halving, the development of BCH will be more urgent. Because whether it is BTC or BCH, under the premise that the total supply remains unchanged, the block rewards will decrease after the production reduction, and the miners' income will be more dependent on transaction fees. However, BCH has not yet been adopted on a large scale, the transaction volume on the chain is not large, and the transaction fee may not be able to meet the income needs of miners, which will affect the operation of the network. "I hope that BCH can benefit from its large blocks. , give full play to the characteristics of its electronic cash and achieve mass adoption.”

Jiang Zhuoer, the founder of Lebit Mining Pool, also mentioned the current shortcomings of BCH in the interview: BCH is still too small, and it may be affected by some unexpected events, or even die prematurely. One of the examples is Satoshi Aoben's split of BSV, which caused the loss of some people in the community that was still in the development stage, and dealt a major blow to BCH.

In addition, Jiang Zhuoer believes that BCH has not yet formed a closed loop in some links, "For example, the issue of developers' income and where the developers' money comes from has not been well resolved yet."

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Strengthen the payment scenario and expand the smart contract

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BCH development route

In the past two years, the developers of the BitcoinCash network have continuously upgraded to improve the network processing efficiency and enhance its most important "payment" experience as a currency. On November 15th and May 15th every year, BCH will be upgraded around the two key points of performance and security, such as code optimization for large blocks, and the avalanche protocol of "0 confirmation 100% security".

In May last year, the upgrade of BCH once again increased the transaction verification speed of BCH. Prior to this, each transaction initiated by the user would be signed once, which would cause congestion when multiple transactions were initiated at the same time. That upgrade allowed the network to realize the function of signing multiple transactions at one time, which greatly shortened the transaction time.

On November 15, two new consensus protocols were added to the BCH network for the same purpose of improving verification efficiency and being compatible with batch verification. Another upgrade point is a fix that makes most transactions on the BCH network immutable, further strengthening security.

Both transaction efficiency and network security serve the ultimate essence of BCH, the "payment" scenario. BCH has gained support in online shopping and offline restaurant consumption. According to the official website, there are now more than 190 merchants around the world that accept BCH payments.

Townsville, located in Queensland, Australia, is known as the city of BCH, where more than 100 shops support BCH payment. Some investors who have been to the local area before described that when they are lucky, they can also use BCH to pay for taxis.

In addition to the payment field, BCH's more "jumping" function is smart contracts. At the beginning of last year, developers added the SLP (SimpleLedger Protocol) protocol to the BCH network to realize the smart contract function of issuing coins.

This is the biggest change of BCH as a member of the BTC family tree. At that time, it also brought some market doubts: How could a currency network that focuses on efficient transactions also take the route of issuing coins? The BCH community regards this as a manifestation of the diversified development of network functions.

At present, there are thousands of Tokens issued based on the SLP protocol. On March 21 this year, it was reported that Tether will issue USDT on the BCH public chain based on the SLP protocol, but so far, there is no BCH version of USDT in the market.

"I hope BCH can accumulate experience in the first halving, find its own problems, and fix some defects as soon as possible, so that it can be used in more scenarios." This is the expectation of Wang Hongli from the BCH Chinese community. He hopes that miners will be rewarded for producing blocks After the halving, the community should not be affected by the harsh environment and minimize fluctuations in computing power. "Of course, it would be better if there is a significant recovery in prices."