1/n With the #Bitcoin halvening in sight and the $BCH & $BSV halvings happening this past week, I decided to dive into @coinmetrics' on-chain data myself and create some charts to compare their hash rate and fees as a percentage of the block reward over time.
A thread. 👇
A thread. 👇
2/n Let's start with the one and only Bitcoin; #BTC. $BTC's hash rate has been steadily growing over time. As the charts clearly show, the halvenings (striped vertical lines) definitely didn't create a 'mining death spiral' - the hash rate actually accelerated afterwards. 
3/n The most likely explanation for the growth in hash rate after the halvenings is that as #BTC price increased as a result of the Quantitative Hardening (h/t @_Schmiegle), mining became more profitable, attracting new miners and thus hash rate.
4/n Then a look at $BCH. On August 1st, 2017, Bitcoin Cash hard forked away from Bitcoin. After a volatile period, it found an uptrend in hash rate - until it forked into $BAB & $BSV on November 15th, 2018. After another uptrend since then, its hash rate dropped again (...)
5/n (...) after its first halvening on April 8th, 2020. The $BCH hash rate is currently at levels similar to after the $BSV hard fork. It recovered after that hard fork, but with its coin issuance now also halved, it'll be interesting to see if it can recover again.
6/n Third in line is $BSV. After initially losing the hash rate war with $BAB for the $BCH ticker, its hash rate saw a large uptick early 2020, but lost it all again after yesterday's halvening.
8/n #Bitcoin's (and thus also its forks') long-term security will eventually be paid for by transaction fees. As the new coin issuance halves every 210.000 blocks, it becomes more and more important that there will be enough fees to pay the miners to keep hashing along.
9/n #Bitcoin's fees as a percentage of the total block reward looks like this. During bull markets, when the blockchain got congested as a result to the growing number of transactions, users started paying higher fees to get their transactions confirmed by miners.
10/n After the bull markets cools down, fees become cheaper again, after which #Bitcoin relies more on the new coin issuance again. The decline since August 2017 can also be attributed to the activation of Segwit, which also helps lower the fees.
11/n For $BCH, the fees as a percentage of the block rewards were in a downtrend since it forked from #Bitcoin, after which it stabilized at a low level. Simply put; if the blocks are never full, fees remain low. Apparently that doesn't mean people will actually use your chain.
12/n Unlike $BCH, $BSV actually did find a bit of an uptrend in fees as a percentage of their block reward sinds forking off $BCH. I don't follow $BSV at all so I have no explanation for this; if anyone does feel free to explain in the replies.
13/n The combined chart for $BTC, $BCH & $BSV. #Bitcoin clearly has the most healthy fee market of the three (notice the logarithmic y-scale). Interestingly, $BSV seems to have topped $BCH from a fees perspective. Although I doubt expensive gigameg-blocks is what they aim for?
14/n I am very curious what these charts will look like in a few months, after the mining incentives find a new equilibrium. I personally expect #Bitcoin's hash rate to briefly stagnate short-term, but find a growth pattern again once the $BTC price finds another uptrend.
15/n Similarly, I expect the fees as a % of the block reward to find a similar gradual growth but with increasing tops as a logical result of the lower new coin issuance (=denominator of the ratio). The continuous chart shows that #Bitcoin's fee market is just getting started. 🔥
@threadreaderapp unroll
Minor correction to this tweet; the denominator here is actually the sum of the new coin issuance and the transaction fees. It is applied correctly in the chart itself nonetheless.
