Bitcoin Cash halves for the first time

This morning Bitcoin Cash (BCH) underwent its first halving since forking from Bitcoin (BTC) in 2017. New BCH issued per block has now dropped from 12.5 to 6.25. At current prices Bitcoin Cash’s daily revenue to miners will drop from $471,600 to $235,800.

Bitcoin Cash’s halving came weeks before Bitcoin’s due to BCH’s Emergency Difficulty Adjustment (EDA), set by the BCH developers to incentivize miners to prioritize BCH’s transactions over that of BTC’s. Miners leveraged this mechanism to maximize their profit by reducing their BCH mining output while waiting for the Emergency Difficulty Adjustment to reduce BCH’s difficulty, which in turn would lead to higher returns. As a result, 120,000 more BCH than BTC were mined from August 01, 2017 until November 13, 2017, when Bitcoin Cash underwent a hard fork to change the difficulty adjustment algorithm.

Bitcoin Cash traded up as much as 10% late last night in anticipation of the event. According to fork monitor, BCH has only mined 1 block in the two hours since the halving.

Why it matters:

• Bitcoin Cash kicked off the halving season for Bitcoin and all its forks. BitcoinSV is expected to halve later this week, and Bitcoin is expected to halve in the weeks to come.
• Bitcoin Cash’s hashrate rose more than 113% to start the year ahead of the halving, but like that of Bitcoin’s, hashrate has since plummeted amidst the recent price drop.
• While it’s temporarily less profitable to mine on BCH, we could see SHA-256 miners to switch over to BTC in the weeks before its halving.
  

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