BCH production cuts soon, shortcomings in computing power

Source: Honeycomb Finance News

There is no price binge in the market.

It is expected that at 11:30 on the evening of April 8th, Beijing time, Bitcoin Cash (BCH) will usher in its first production halving after its birth-the reward for miners will be reduced from 12.5 BCH to 6.25 BCH.

At 19:30 on April 7th, there are 28 hours left before the expected production cut. BCH temporarily reported $ 260, a 7% increase in 24 hours.

The 7000 USD on the BTC station led to the return of the entire cryptocurrency market, and also brought a good market for the production reduction of the BCH network. But among the top ten assets of cryptocurrency market value, BCH's short-term 7% increase is not the highest.

The reduction in production did not bring about a price binge. If the price does not have a greater breakthrough, the reduction in production one month earlier than BTC may cause the short-term loss of computing power from BCH. The BCH that challenged the currency king was blocked and long.

Prices have not risen sharply before production cuts

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

At 11:30 on the evening of April 8, the BCH network will usher in the first production reduction after independence-the miner reward 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 market's recovery from the "3 · 12" plunge has provided a good opportunity for BCH to reduce production. On April 6, BTC rebounded above $ 7,000, and BCH also rose from $ 230 to $ 259 in 24 hours, an increase of 11.7%.

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

The current reduction in production has not brought more upside momentum to BCH, and the halving benefit has been released earlier.

After the opening year of this year, in addition to the BTC genealogy, the prices of a batch of "halved coins" such as DASH and ETC are rising. BTC has risen from a maximum of 6950 US dollars to 10500 US dollars; ETC has increased from 4.1 US dollars to 13.2 US dollars; BSV is the most exaggerated. From $ 92 to $ 455. After BCH was unwilling, he started the rally from the low of $ 195 on January 2 and broke through the high of $ 500 on February 14.

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

Halving can no longer lift investors' appetite.

Wu Jihan, the founder of Bitmain and a recognized opinion leader in the BCH community, is not optimistic that "halving" can directly drive up the price of coins. In October last year, he predicted that the time of the bull market and the bear market will be longer, and the halving may not be synchronized with the bull market.

The trend of Litecoin that was halved in advance last year was one of Wu Jihan's judgments. He believes that the speculation against the halving stimulated the currency price to rise for a short time, and then suffered a slamming again. This process did not have the idea of ​​breaking through the previous high. . In addition, as the market value and volume of Bitcoin expand, the user population also expands, and the volatility gradually decreases.

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

At the time, BCH also seized the historical opportunity to become independent from the BTC community before the currency market peaked, and allowed a group of "sugar dividers" to enjoy the early dividend. In mid-December 2017, the BCH station peaked at $ 4,120. At that time, BTC hung high at $ 20,000.

BTC and BCH price trend comparison

BCH, who 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 the moment, no cryptocurrency can create another prosperous age, not to mention the halving of BCH and BSV, and the expectation of BTC's production cut has become bleak in the wave of hype and the previous round of plunge.

Compared with the impact of network output reduction on the current currency price, the BCH community pays more attention to the future of Bitcoin Cash, including the computing power closely related to network security, application scenarios, and its potential to make a useful and reliable currency.

"Facing short-term computing power loss after reducing production"

In the days approaching halving, the market uploaded news that miners switched from BCH to mining BTC.

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

BTC.com shows that as of 4 pm on April 7, BCH has a hash rate of 3.28 EH / s, BTC has a rate of 105.16 EH / s, and BTC has nearly 30 times the hash rate of BCH.

However, since January this year, BCH's overall network computing power is generally on the rise. BTC.com shows that in early January of this year, BCH has a minimum hashrate of 176PH / s. As of 4pm on April 7, the hashrate of the BCH network was 543PH / s.

This year's BCH computing power fluctuation trend

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

However, he also pointed out that after halving, the development of BCH will be more urgent. No matter whether it is BTC or BCH, under the premise that the total supply is unchanged, the reward for block production after the production reduction will be less, and the income of miners 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, so it will affect the operation of the network. "I hope that BCH can benefit from its large blocks. , To take advantage of its electronic cash features and achieve large-scale adoption. "

Jiangzhuoer, the founder of the Lebit mining pool, also mentioned the current short board of BCH in the interview: BCH is still too small, it may be affected by some unexpected events, or even die. An example of this is the breakup of BSV by Aomoto Satoshi, which caused some of the people in the community that were still in the development stage to lose some people and caused a major blow to BCH.

In addition, Jiang Zhuoer believes that BCH has not formed a closed loop in some links. "For example, the developer's income problem, where does the developer's money come from, and it has not yet been well resolved."

It can be seen that BCH will not only face the market test after production reduction, but network development and computing power support are challenges.

Strengthen payment scenarios and expand smart contracts

BCH, which was independent from the Bitcoin community due to expansion differences, has struggled for the next two years and has been fighting for the ideal of "being a reliable currency that everyone in the world can use".

BCH development route

Over the past two years, the developers of the BitcoinCash network have continuously upgraded their network processing efficiency, enhancing its most important "payment" experience as a currency. Every year on November 15th and May 15th, BCH will be upgraded around the two key points of performance and security, such as code optimization of large blocks, and the "0 confirm 100% safe" avalanche protocol.

Last May, the upgrade of BCH once again increased the speed of BCH transaction verification. Prior to this, every transaction initiated by the user would be signed once, which would cause congestion when multiple transactions were initiated at the same time. That upgrade enabled the network to sign multiple transactions at once, greatly reducing transaction time.

On November 15th, two consensus protocols were added to the BCH network, the purpose of which is also to improve the efficiency of verification and is compatible with batch verification. Another upgrade point is a repair procedure, which makes most transactions on the BCH network immutable, further strengthening security.

Both transaction efficiency and network security serve the BCH ultimate payment "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 accepting BCH payments worldwide.

Townsville, Queensland, Australia is known as the BCH city, where more than 100 shops support BCH payments. Previous investors who have been to the local area have described that when you are lucky, you can also use BCH to pay for a taxi.

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

This is the biggest change of BCH as a member of the BTC genealogy. At that time, it also brought some market doubts: How can 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.

Currently, 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 as of now, the BCH version of USDT has not been seen on the market.

"I hope that BCH can accumulate experience in the first halving, find its own problems, and be able to fix some defects as soon as possible, so that it can be used in more scenarios." This is the expectation of Wang Hongli of the BCH Chinese community. He hopes that miners will give block rewards After the halving, the community should not be affected by the harsh environment, and reduce the fluctuation of computing power as much as possible. "Of course, it is better to have a clear rebound in prices."