BCH Network Cost, Mining Incentives, and Future Security

I’ve been using BCH for awhile now. It’s great. Paying half a cent per transaction (or less) vs. small block Bitcoin’s $5-$10 just makes sense. I’ve enjoyed the experience so much I’ve decided to dust off a couple of my old hobby S9 ASICS and start mining BCH.

But this has got me thinking. What is the future of mining profitability with such low transaction fees?

The current hashrate of the BCH network is about 2.2 EH/s. Assuming 200 TH/s runs at about 5500W with an average power cost of $0.05/kWh, the network currently costs about $3,050 per hour to run.

Without block rewards, the network needs $504 per block in transaction fees just to break even. With $0.005 average tx fees, that’s 100,800 transactions per block or 168 transactions per second - again, just to break even.

It’s early in the morning, I’m sure my math is off somewhere, but you get the point. The network is currently doing nowhere near enough volume to pay for its hashrate with transaction fees alone.

So tx volume has to massively increase, tx fees have to gradually increase, or hashrate has to eventually fall. Assuming the latter, what does that do for network security? It’s not hard to imagine a scenario where hashrate falls enough that BTC pools could flash execute 51% attacks.

Does it make sense to eventually move away from SHA256? I’d be curious to know what the current thoughts about this are.