The much-awaited bitcoin cash halving happened yesterday and, the effect of that event are already showing. The bitcoin hard fork saw its mining reward on the blockchain reduced to 6.25 BCH from it’s previous reward of 12.5 BCH.
And the effects on the digital asset are already evident with the hash rate dropping immediately the halving took place. In a chart released after the halving happened yesterday, it showed that the hashrate of BCH dropped significantly from 4.36 EH/s to 1.7 EH/s which puts its decrease to a little less than 60%.
Alcane research published a report which pointed out the major consequences of the halving of the crypto. In this document, it states that the there is a high possibility that the hash rate might drop drastically which suggests that the volatility will take its toll in the aftermath of the halving.
Managing partner at Unbound capital, Zach Resnick has stated that the current lack of impact from the crypo might be as a result of miners fleeing the mining network. He stated that the Coronavirus pandemic currently spreading across the world has caused panic and touch economic times.
“Given the current market conditions, this bullish speculative frenzy coming to counteract the halving doesn’t seem likely this time around. Thus, miner revenue will truly halve, leading to many miners becoming unprofitable and shutting down.” he said.
Increase In Block Time
Before it was halved, bitcoin cash always took around ten minutes to be mined giving the network six blocks per hour on the average. As at the time of writing this, there are period when the network produces only half of the previous amount or 60% at most.
After the halving took place yesterday, BitMEX research noticed that the interval between blocks has increased by a substantial amount. As at the time, a block was mined in a little over an hour. “It has now been an hour since the halving and still no more blocks. After the 50% reward drop, did miners leave for other coins or is this just variance?” BitMEX said.
In terms of the effect of the halving on price, there was no serious damage as it still traded around $264 making just a 3% decrease yesterday.
It is unclear if the halving of the digital asset would cause harm to investors and miners of the coin or not but in they might be willing to consider moving to other cryptocurrency in the coming days. With the hash rate dropping, a big percentage of them are considering their options somewhere else.