During 2018, when the initial Bitcoin frenzy was wearing off, and several miners were hanging their boots, Bitcoin hash rate entered a free fall. By December 2018, it reached 31 EH/s. Last week, things took a 180-degree turn as the hash rate reached a record high of 102 quintillion hashes. The rising hash rate shows that the processing capacity of the Bitcoin network is rising alongside miner confidence. Bull days may be ahead for the crypto market.
What Is Hash Rate?
The rate at which a mining machine can complete a Bitcoin code operation is called hash rate. In a blockchain, the transaction blocks need to be hashed before they could be added to the blockchain. In simple terms, the number of times the Bitcoin network tries to solve the mathematical puzzles essential to creating a new block. A higher rate of hashing improves a miner’s chances to mine the next block and receive block rewards.
The higher hash rate also signifies increasing miner confidence. It means that miners are bullish on the price of Bitcoin and are willing to dedicate more resources to mine new blocks. If the price of Bitcoin is falling, the hash rate will also fall because miners will expect losses. Note that mining Bitcoin is an expensive and resource-intensive process. With more miners dedicating more resources at the same time, mining becomes more expensive.
New Milestones for Bitcoin
As the network hash rate crossed 102 quintillion hashes, the mining difficulty of the network was readjusted to 12 trillion, marking a 60% rise since mid-June. The coin’s average two-week hash rate has also gone beyond 85 EH/s. Miners are still not ready to give up on lucrative profits, even as the competition and difficulty increased. The past three months witnessed the deployment of 600,000 new mining machines on the network.
With block rewards halving to 6.5 BTC in May next year, miners want to gain as many coins as possible. When miners start hodling coins, the market volatility goes for a toss and prices go bullish. This could signal another significant bull run for the digital currency.