Bitcoin Cash Halving Results in Miner Exodus and Profitability Decline

The quadrennial block reward halving for Bitcoin Cash (BCH) has come and gone, with miner rewards dropping from 12.5 BCH to 6.25 BCH. The event marked a pivotal moment for the fifth-ranked cryptocurrency by market capitalization, as it was its first 50% block reward reduction since emerging as a hard fork of Bitcoin (BTC) back in 2017.

The Bitcoin Cash chain experienced another split that led to the creation of Bitcoin Satoshi Vision (BSV) in late 2018. The chain of events leading to the BCH blockchain split caused a cascade of network issues, as the hash war between both factions almost led to a mining death spiral on the Bitcoin blockchain.

BSV’s halving event is coming up in less than a day, and Bitcoin’s halving will come in mid-May. The halving for both BCH and BSV is happening earlier than BTC’s because Bitcoin Cash temporarily used a different algorithm to adjust its mining difficulty back in 2017, thus speeding up the block creation time.

There are several analyses of halvings, as it occupies an important position in the bull cycle for BTC, with Bitcoin’s price setting a new all-time high within a year after the previous 50% reduction in the block reward.

Halving, a summary

Approximately every four years — more specifically, after 210,000 blocks have been mined — the block reward earned by miners on the BCH, BTC or BSV chains reduces by 50%. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, coded the halving as an inflation-control measure in the blockchain protocol.

Together with the finite supply of 21 million “coins,” the halving constitutes the basic rules of the Bitcoin protocol — and by extension, those of forks like Bitcoin Cash and Bitcoin SV. The periodic inflation drop slows down the supply of new coins, thus preventing the emergence of an inflationary-skewed supply-demand dynamic. Without the halving, miners could, in theory, acquire all of the block rewards, likely causing the price to crash.

Indeed, the halving and hard cap…

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