The BCH hashrate took a steep dive after the recent reward halving. After reaching lows not seen since Q4 2017, it may be normalizing and has begun to rebound slightly.
- BCH forked as scalable solution for limited block space
- Recent halvening resulted in dramatic reduction in hashrate
- The hashrate has somewhat recovered in the following days
In 2017 BTC forked due to disagreement on Segregated Witness (SegWit) and block size to make what is now known as Bitcoin Cash (BCH). This fork derived from an intention to improve the scalability of the network in a time where block space was very limited at 1MB, causing transaction fees to skyrocket.
SegWit aimed to reduce transaction size by pulling transaction signature data outside the transaction. Much of the faction behind SegWit also pushed for a higher block size and reduced block time of 10 minutes to further increase the scalability of BTC. The community could not make consensus on this topic, and BCH forked from BTC on August 1st. It quickly garnered momentum in the crypto community. It currently ranks as having the 5th highest market cap.
With a block time of approximately 10 minutes instead of 12, BCH has outpaced Bitcoin in a reward halving. Ahead of BTC’s May halvening, BCH recently halved its reward from 12.5 BCH per block to 6.25 on April 8th.
BCH halvening pushes miners out
The BCH hashrate significantly dropped after the reward halving, as many miners became unable to maintain a profitable operation for BCH. On April 8th, after the reward halving, the BCH hashrate dropped for nearly two straight days. Coming from a high of 4 EH/s on the 7th, the hashrate fell over 80% to 718 PH/s on the 9th/10th.
This reduction brought the hashrate down levels not seen since recently after BHC’s inception in Q4 2017. A select few mining pools gained traction in the Bitcoin Cash ecosystem as many smaller miners pulled out. Notably, Bitcoin.com, Antpool, and ViaBTC, and BTC.TOP have won a majority of the blocks since the halving.
Hashrate Trending upwards
After the BCH hashrate hit its low on April 9th, it has since begun to climb its average daily hashrate. The hashrate reached over 3 EH/s, a 300% increase since reaching its low on the 9th.
BCH Hashrate chart – Sourced from Coinwarz.com
Factors outside of block reward and market price may influence some of the miners as they pull back power towards BCH. As smaller miners are forced out, bigger mining pools may decide to increase mining power to increase chances of winning the block reward.
This essentially is a confirmation of previous notions around the upcoming halvings leading to a consolidation of mining power. With less than a month before Bitcoin’s halvening, BCH may be a sign of trends to come.
Written by: Nate Christenson
Hashpowah Editor & eCommerce Product Manager