2020 Halving’s Likely Impact on Bitcoin, Bitcoin Cash

In seven months, the Bitcoin network will have its block reward halving. That is, based on the next which is estimated to happen on 14 May 2020, the Bitcoin block mining coin reward every 10 minutes will decrease from its 12.5 per block presently to 6.25 coins. This will, in general, lessen the top cryptocurrency’s supply afterwards.

The built-in reduction is already causing some in the space to start looking up to what to expect this time including those fanning bullish theories as to why it could lead to a spike in the price of Bitcoin. When calculated in USD, the coming halving will reduce the new supply of Bitcoin by more than all prior halvings combined. With the 18 millionth Bitcoin now mined on Saturday October 19, out of the total 21 million to be ever produced, the network is marking a major milestone in the countdown to the last three million to be mined until 2140 according to an estimate. It shows that harvesting the remainder 15% of the total supply will drag much longer than the decade it took the bulk 85% already in circulation.

On the other hand, the four-year event is being prescribed as one that is likely to negatively impact the running of Bitcoin Cash (BCH), as a fork of Bitcoin, since its halving is slated to happen about a week ahead of Bitcoin’s. BCH reaching its first halving earlier than Bitcoin’s is going to be due to its initial difficulty adjustment algorithm  (DAA) which has been suggested could pose security challenges to BCH as both networks half their rewards. It is alleged that the 7-day gap could half the BCH network’s hash rate within the period and reduce BCH’s security in terms of “percentage of the available SHA2 hash rate” thus giving room to a 51% attack opportunity.

Generally, regardless of the differences in networks, the impact of each halving is exponentially lower each time one occurs especially as the majority of the coins are already mined. The impact it will have on the cryptocurrency market will depend on the fraction of actively traded bitcoins that’s removed from the market by the halving. But if already priced in, it may not have any impact at all.

From the reported flop in the performance of Bakkt’s launch to the data breach of the world’s top cryptocurrency exchange, Binance, it is clear that industry-related news do not seem to have had much impact on the price of Bitcoin of late. So is the rejection Facebook’s crypto project, Libra, has faced thus far as states and major payment service providers like Visa and PayPal turned their backs on it.

In a way, it could be imperative to start eyeing less known but highly-potential altcoin projects. With the Lightning Network growing, and the prediction market and DeFi initiatives gaining popularity, the coast could be getting clearer for useful alt projects as it may dawn on many that Bitcoin price may not rise soon.

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