Bitcoin cash (BCH), the cryptocurrency that broke away from bitcoin (BTC) due to a heated community disagreement in 2017 and which is also being traded on Bitcoin Pro, is about to reach an important blockchain milestone. At block 630.000, scheduled for Wednesday morning in the east, the number of BCH coins created every 10 minutes will decrease by half, from 12,5 to 6,25.
This will be the first half-life for BCH. The event is a foreshadowing of the same process that will take place on a large scale on the BTC blockchain next month. The market capitalization of BCH is worth about a twenty-fifth of that of BTC.
As if that wasn't enough, bitcoin SV (BSV), the cryptocurrency that broke away from BCH after another tough battle, will only halve a day later. Halving is seen as monumental as it highlights that the money supply is fixed, a feature that differentiates BTC and its doppelgangers from most traditional currencies.
Furthermore, halving is undoubtedly an important variable that has led to increases in bitcoin prices in the past.
Why is Bitcoin Cash halving ahead of Bitcoin?
The halving is occurring at the beginning of the year for BCH and BSV because BCH had, for a period, a different algorithm which determined the extraction speed in adaptation to the difficulty of mining, and this accelerated the process of creating the blocks .
This slightly early date could have unintended consequences. BSV developer Brad Jasper said that in the short term this week's halving will be counterproductive for their respective cryptocurrencies.
Many miners are expected to go to greener pastures. The main source of income for miners are block rewards, which will be cut in half by half, making activities less profitable.
In the meantime, BTC block premiums will not halve for another month or so. In the long term, Jasper said, BSV will prevail thanks to its "usefulness" as a network that favors the growth of transactions.
Arcane Research, based in Norway, agrees on the loss of computing power in a report released last week, but went further. If the hash's power decreases, Arcane said, 51% of the two cryptocurrencies will be more vulnerable to attack, and the risk of attackers gaining control of the network grows.
Jasper said he expects the situation to change rapidly once BTC comes to its halving shift next month, as it will no longer be profitable compared to its lineage of the same name.
That said, not everyone is convinced that halving will lead to something exciting or out of the ordinary. Bitcoin.com CEO Roger Ver, known initially as "Bitcoin Jesus" for his belief in BTC before defecting to the BCH camp, said BCH's halving will be a "non-event" from the story of BTC halving. "The last two have been non-events, and I expect this to be similar to the others," he said.