Bitcoin SV (BSV) On Death Spiral As Miners Flee The Blockchain After First Reward Halving
The mining of block #630,000 on the Bitcoin Satoshi Vision network, truncated to Bitcoin SV, on April 10th 0048 hours GMT, effectively cut the supply rate of the token by half. A miner mining any block from the halving time will receive 6.25 BSV – a fact that is affecting the overall state of mining on the network as miners escape to the more profitable Bitcoin blockchain.
BSV completes halving, miners in limbo
There has been a general consensus a halving is healthy for asset prices. This because of the assumption that reducing the reward would lead to a sense of scarcity for the asset. That being so, the rewards for mining each block are expected to drop by half as predicted. From 12.5BSV to 6.25BSV.
With the halving, the new daily output of BSV blocks jumps to 900. This means all of the current miners are competing for the same 900 blocks daily. At current prices, this would amount to $200k per day possible.
BSV currently trades at $191, a huge 12% dip from intraday highs shortly before the halving happened. This has raised the fears across the community and miners who have seen their profits cut by more than half –enticing most to switch coins or effectively shut down their miners.
According to Blockchair’s Bitcoin SV explorer, in the past 12 hours since the halving, only 24 blocks have been mined – a huge disparity from at least 72 blocks that should be mined. Currently its 70% more profitable to mine BTC than BSV.
Bitcoin Cash also halved completed halving on Wednesday
Notably, Bitcoin Cash (BCH) also underwent the halving event on Wednesday triggering a similar reaction from the miners and the market after the 630000 block was mined by Antpool. Their transaction per second rate tumbled from 116tps to 1.1tps. The mining profitability post halving also dipped to over 80% that of Bitcoin and with the mining difficulty not dropping led to a mass exodus of miners who are mainly profit-motivated.
This has spooked the community as consequently, the hash rate has dropped raising security concerns. A significant exodus of miners would leave the network vulnerable to a 51% attack meaning it wouldn’t be impossible for rogue actors to reach the 50% threshold required to fully control the network.
Bitcoin halving is expected to occur in 34 days from this writing May 13th 2020.