If miners are dissatisfied with the halving of BCH incentives, it may cause network security issues

Odaily Planet Daily Translator | Moni

Over the past week, Bitcoin Cash (BCH) has performed well alongside other cryptocurrencies as the market began to show signs of recovery. This week, Bitcoin Cash price has increased by 87.32%, from $165.9 on March 31, 2019 to $314.67 (at the time of writing this article).

"Bitcoin Jesus" Roger Ver also recently supported Bitcoin Cash, saying that it not only has more market credibility than Bitcoin, but is also welcomed by many Japanese merchants. In addition, Roger Ver does not seem to be optimistic about the Bitcoin Lightning Network, believing that the Lightning Network provides users with a "horrible" experience and even hinders the long-term scalability of Bitcoin.

Then, just when the market environment seemed good, a newly disclosed analysis report by Long Hash showed that Bitcoin Cash may soon face a major problem: the halving of block incentives next year may have serious side effects on the security of the entire network.

In the early stages of the fork from the Bitcoin blockchain, the issuance of Bitcoin Cash was very high, which made it more profitable for miners to mine Bitcoin Cash than Bitcoin. In addition, the Bitcoin Cash network has a completely different mining difficulty adjustment algorithm (DAA), which can increase the currency base faster than Bitcoin. Under the stimulation of these advantages, more and more miners began to flock to the Bitcoin Cash network to mine, which also caused a sharp drop in the hash rate of the Bitcoin network.

However, with the upcoming Bitcoin Cash block incentive halving, a lot of things will change, and some security issues may even arise soon.

First, the halving of block rewards means that the overall reward will be reduced. The reduced block incentive subsidy will eventually make miners unwilling to use high computing power to protect the network, which will lead to a decrease in blockchain security. This problem is not without precedent. The failure of the SegWit2x hard fork in 2017 has actually proved that miners attach great importance to block incentives.

Secondly, the current Bitcoin Cash network is still relatively unsafe, because both Bitcoin and Bitcoin Cash use the SHA-256 mining algorithm, so many miners share computing power. If the Bitcoin Cash block incentive is halved, some miners will inevitably choose to leave the Bitcoin Cash network and switch to the Bitcoin blockchain, which will further increase the security strength of the Bitcoin Cash network.

In fact, Bitcoin has always dominated the SHA-256 mining algorithm in the current market, which has also made the security of the Bitcoin Cash network questionable. However, if the price of Bitcoin Cash can continue to rise during the recent market recovery, then even if the block incentive is halved in the later period, its network security may remain unchanged, because miners will continue to stay in the Bitcoin Cash network due to price factors and use their high computing power to maintain network security.