- Bitcoin Cash completed its halving a little over 24 hours ago
- Network hash rate continues to plummet making a 51% attack feasible
Bitcoin Cash, a popular fork of Bitcoin, underwent a halving a little over 24 hours ago. The drastic decrease in block reward has led the network hash rate to plummet to less than 1 EH/s. Before the fork, the network hash rate was over 5 EH/s. As a result, you can 51% attack Bitcoin Cash for less than 1 Bitcoin, only $4500.
The highly anticipated Bitcoin Cash halving event halved the current block reward from 12.5 BCH to 6.25 BCH. Halvings helps maintain the emission schedule in order to stay under the fixed supply of 21 million. With a block time of 10 minutes, and a halving occurring every 210,000 blocks, this was a once in a 4-year event.
The halving directly affects the miner on the Bitcoin Cash network. By cutting the block reward in half, miners effectively lose half of their income. As a result, many miners will find it profitable to mine another cryptocurrency and thus, leave the network.
In addition to the block reward decrease, Bitcoin Cash’s price has also plummeted (we covered the price economics of the halving). Many traders pump up the price of a cryptocurrency prior to halving as the currency’s new supply will decrease. However, many traders may sell the currency post-halving to make a quick profit. That is what happened in this case.
Bitcoin Cash was trading around $280 before the halving and is now trading around $255.
The reduction in block rewards and price combined, has led the majority of miners to leave. As a result, the network hashrate took a nosedive, leaving the network vulnerable to 51% attacks.
What is a 51% Attack?
One of the downsides to a Proof-of-Work blockchain is a 51% attack. In a Proof-of-Work blockchain, miners control the blockchain and thus, it is essential to maintain that no single miner has control over the network.
However, if a single miner has over 51% of the network hashrate they can modify or attack transactions on the blockchain. As a result, these attackers can double-spend cryptocurrencies as they control the blockchain.
51% attacks are highly unlikely as they are very expensive to implement, especially on a large POW currency. In addition to the capital, 51% attacks require immense technical know-how and thus the majority of blockchain never experience 51% attacks.
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