Yassine Elmandjra, a cryptoactive analyst at ARK Invest, said in a May 24 tweet that Bitcoin Cash (BCH) hashrate fell 30% from its halving event, and only represents about 2% of SHA-256 hashrate. Elmandjra now thinks it’s only a matter of time before someone takes advantage of the network:
“Surprised because we haven’t seen a full-scale attack yet.”
Bitcoin Cash halving concludes with exodus of miners and declining profitability
According to BitInfoCharts data, the average daily hash rate of Bitcoin Cash dropped by almost 25.6 percent from its April 8 halving. Even so, presumably Elmandjra made his calculations based on data from May 23, where the hashrate was reduced by approximately 33.52 percent. It is worth noting that the hashrate is now much higher than it was initially, after falling by more than 61%.
As reported by Cointelegraph earlier this month, Bitcoin’s hashrate has decreased by about 25% – 40%, new blocks are being generated at a remarkably slow rate and rates are significantly higher than ever since the halving.
Hayden Otto is a Bitcoin Cash event organizer and founder of BitcoinBCH, a development company based in BCH. Otto argues that Elmandjra was misled by Bitcoin’s (BTC) narrative that Bitcoin Cash can be easily hacked by a 51% attack.
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According to Otto, “the formulas they use to determine the cost of a 51% attack do not consider important factors such as the miners’ incentives. He believes that such an attack could not be executed as easily as many suggest, which is why no such attack occurred on the Bitcoin Cash network.
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Otto added that Bitcoin Cash’s hash rate is currently about 3.5% of Bitcoin’s and has been there for years. According to Cointelegraph’s calculations using data from the CoinMetrics hash comparison table, the BCH hash rate is currently equivalent to 3% of the BTC hash rate. In addition, the BCH hashrate was equivalent to approximately 4% on 20 May 2019. These data seem to generally support Otto’s view. He claims that an attack on Bitcoin Cash is unrealistic:
The hash rates of Bitcoin Cash and BSV increase after the BTC halving
“Bitcoin Cash currently accounts for approximately 3.5% of BTC’s hashrate and has been at this level for over a year. Despite this, there have been no attacks because the miners are profit-seeking and there is no incentive to attack. Any attacker will be challenged by honest miners defending the chain, and the 10 block reorganization protection neutralizes any attempt to secretly mine a longer chain. The risk of losing money far outweighs any potential reward, ultimately making any attempt to attack 51% of Bitcoin Cash unviable.
Still, as Otto himself pointed out, the Bitcoin Cash hash rate is generally about 3.5% of what the Bitcoin hash rate is. Because of this, it could be said that BCH needs such block-reorganization prevention measures more than Bitcoin, where the computing power needed to attempt such an attack would be prohibitively expensive.