Since it’s launch in 2017, Bitcoin Cash has got its own community but it still hasn’t got that wide-use when compared to say, Bitcoin or Ripple’s XRP. Aside from a brief bubble around the time of the hard fork, there hasn’t been a lot going on the Bitcoin Cash network. Despite being a top ten cryptocurrency, it seems pretty dead on the system.
There might be more problems around the corner as the first halving of Bitcoin Cash is scheduled for about a year from now. This will have a side effect of weakening the security of the network.
For those that don’t know, a halving event is when the block subsidy is cut in half (hence the name). It is also a part of Bitcoin and Bitcoin Cash’s algorithmically-controlled monetary policies.
During its initial launch, Bitcoin Cash used a new difficulty adjustment algorithm to make sure that the network didn’t come to a complete stop. This new difficulty adjustment algorithm had the side effect of increasing the monetary base at a rate faster than in Bitcoin as the rate at which blocks were mined became erratic.
This unusual behaviour on the BCH network led to a big drop in the Bitcoin hashrate with miners seeing that it was more profitable to mine on the Bitcoin Cash network due to what essentially became a bigger cumulative block subsidy in the form of more rapidly-generated coins. “This had the side effect of slowing down the rate at which new blocks were mined on the Bitcoin network for a brief period of time.”
In the end, the Bitcoin Cash network adopted a new and improved difficulty adjustment algorithm to get their blocks back to the originally intentioned ten-minute intervals.
Looking to the future
So next year, BCH is going to be facing a similar problem to that it made for Bitcoin in 2017.
The block subsidy is only part of the overall block reward, with the rest of it coming by way of transaction fees, just to clarify.
As reported by Long Hash, “Bitcoin Cash is already relatively unsecure in terms of its share of the SHA-256 hashing power on various cryptocurrency networks, and next year’s halving could make matters worse.”