Kraken exchange development director Dan Held believes Bitcoin Cash’s block reward half could be a disaster for the network.
Bitcoin Cash halving will take place in about 160 days and is the first such event for the network. For this reason, there is a chance that the positive evolution of the traditional prices applied for Bitcoin will not happen.
“Half the reward will be catastrophic for Bcash.
Bitcoin Cash halving occurs> block reward is halved> miners switch to Bitcoin (since they share the same mining algorithm)> network security drops significantly> 51% attacks become very easy “
explained Dan Held on Twitter.
His argument is that moving the miners, known as “strip-mining”, has also happened in the past.
Bitcoin miners have significant hash power and, at times, have opted to collect block rewards from the BCH network. It is all the more possible as the hash rate of the Bitcoin network has increased greatly, which means it takes more time and effort to reap rewards.
Another cryptocurrency that went through a difficult halving phenomenon was Litecoin (LTC). A few months before the event, the hype raised the value of the cryptocurrency from $ 22 to $ 140. But about a month before the event, the price started to drop to about $ 60.
In addition, the miners abandoned the network. Litecoin’s hash rate has dropped from 500 TH / s to about 200 TH / s.
The reason is that the investment in L3 mining equipment is not profitable if the block reward is 12.5 LTC. Fewer miners means the network is less secure than it was before the reward was halved.
Higher risk for BCH
In the case of Litecoin, however, there are not too many L3 owners willing to take over the network. In the case of Bitcoin Cash, the situation is different. Even a fraction of the Bitcoin mining power is enough to carry out a 51% attack.
Currently, Bitmain is the largest BCH miner, and the hash rate of the Bitcoin Cash network is about 2.6 ETH / S.
Currently, BCH is trading at around $ 290, after an increase of about 25% in a single week. The market head of the network amounts to $ 5.2 billion, and trading volumes amounted to $ 3.9 billion in 24 hours.