Analysis: A new perspective on the changes in next year's halving, and an analysis of the computing power structure of BTC and BCH

Many people know that Bitcoin will halve in more than 6 months. Halving means that the inflation rate of Bitcoin will drop to around 1.7%. It can be said that it is far lower than the inflation rate of various countries. Therefore, many people judge that the price of Bitcoin will skyrocket based on this. Of course, some people judge that the price will go up based on the increased difficulty after the halving. But what I mainly want to tell you today is that this Bitcoin halving is actually not as simple as everyone imagined. There are actually many complex factors involved. I hope you can read it carefully. All rights reserved. Plagiarism is prohibited.

Before the Bitcoin halving, there was actually a Bitcoin Cash halving. Since both Bitcoin Cash and Bitcoin can use the same mining machine, this is the core element that complicates the entire event. Since the halving involves the issue of miners switching computing power, it is also worth discussing from all aspects.

1. Block generation of Bitcoin and Bitcoin Cash

As of press time, the latest block height of Bitcoin is 605899, and the latest block height of Bitcoin Cash is 611149, which means that there is a difference of 5250 blocks between the two. If the difficulty is adjusted every 2016 blocks, the estimated time difference between the halving of the two is about 35 days. According to the current progress, if the block production speed of Bitcoin Cash does not slow down and the block production speed of Bitcoin does not increase, then the difference in the number of days between the halving of the two should not be too large.

2. Changes in computing power caused by Bitcoin Cash halving

Since 35 days is a relatively long time, if Bitcoin Cash is halved first and the price of the currency is not at a suitable position, it may lead to the switching of miners' computing power. Here we assume that miners are profit-driven, so the computing power will quickly switch to Bitcoin. Because the reward for each block of Bitcoin is still 12.5 bitcoins in about 35 days, that is, the reward will be more, which will bring a lack of computing power to Bitcoin Cash. Here we assume that the price growth rate of the two is the same.

3. Bitcoin Cash could be attacked

As mentioned earlier, if Bitcoin Cash does not reach a suitable price, it will cause miners to switch their computing power. We can call this part of the computing power overflow computing power. That is to say, although the difficulty may be adjusted urgently, the number of coins issued per unit time will decrease. Therefore, about half of the computing power may go to Bitcoin, which will make Bitcoin Cash more vulnerable to 51 attacks.

4. Bitcoin Cash price change forecast

If Bitcoin Cash wants to get rid of the computing power attack, it can only increase the network security by increasing the price of the currency. So how much is the appropriate price increase? Assuming that the computing power will not change, halving means that the number of coins produced per unit time is reduced by half. If you want to maintain the computing power unchanged, the price can only be doubled. If the computing power becomes two-thirds of the original, then the price needs to increase by one-third to allow miners to continue mining, which is also the lifeline of mining.

5. Before Bitcoin Halving

After the Bitcoin Cash halving is completed, the market will begin to wait for the Bitcoin halving. During this process, part of the computing power will be switched to Bitcoin mining. Of course, the amount brought will not be particularly large. Therefore, on the whole, the Bitcoin halving may proceed normally. In terms of price, since Bitcoin Cash has been halved, there is enough time to adjust the difficulty to a suitable state. Judging from the outcome that miners can switch between the two at will, the price may also change during the period before the Bitcoin halving. If the price of Bitcoin Cash doubles during the 35 days before the Bitcoin halving, then the price of Bitcoin will theoretically increase by 50%.

6. Bitcoin halving

Finally, Bitcoin will be halved. According to the difficulty adjustment mechanism, it will take 14 days before the next difficulty adjustment. Therefore, the profit from mining Bitcoin during this period will be very low. Therefore, some miners may switch to mining Bitcoin Cash, which will increase the computing power of Bitcoin Cash and reduce the computing power of Bitcoin. Eventually, a balance will be reached between the two, and no matter which one is switched for mining, the profit will be relatively small. The difficulty is adjusted to 14 days. After 14 days, the difficulty of Bitcoin returns to normal, and the computing power fluctuation after the Bitcoin halving is completed.

Summarize

According to estimates, it can be roughly concluded that during the period between Bitcoin Cash and Bitcoin halving, miners can switch to Bitcoin mining first, and then switch to Bitcoin Cash mining, which may result in relatively good returns. After the difficulty of Bitcoin is adjusted 14 days after the halving, everything returns to normal. Here, we regard ASIC computing power as a hard currency, that is, computing power is money, and the actual situation is mainly affected by the currency price. This article is for reference only!