Bitcoin Hash Rate Sets Record High Boosting Network Security
The Bitcoin (BTC) hash rate — the total computing power of the bitcoin network — reached new all-time highs this week, data from monitoring resource Blockchain.com confirmed on June 19. Bitcoin Hash Rate Sets Record High Boosting Network Security
As the Bitcoin price set a new annual record above $9,000, hash rate, which can be taken as a measure of how much interest there is in mining bitcoin, shot higher than ever before.
For Wednesday this week, the most recent day for which data is available, bitcoin’s hash rate had reached 65.19 trillion hashes per second (Th/s).
The activity did not go unnoticed, with hash rate constantly gaining every day throughout this week.
“Hashrate (more often than not) leads price,” Keiser Report host and major Bitcoin bull, Max Keiser, wrote on Twitter in related comments Thursday.
“This is something not even (bitcoin’s) most ardent supporters understand.
It’s the heart of the incentive scheme. It’s Satoshi’s ability to hack humans to create Gold 2.0.”
The number comfortably beats the previous record of 60 Th/s set in late September 2018, and continues the metric’s upward trend.
As Cointelegraph reported, the period after last September proved to be a retrograde step for the bitcoin network, with hash rate falling for the first time ever until the new year.
Various other metrics – and, of course, price – also saw suppression, before network activity picked up in Q1 2019. Thereafter, beginning April 1, the bitcoin price followed, sparking an almost unbroken three-month bull market, which continues. Bitcoin Hash Rate Climbs, Bitcoin Hash Rate Climbs, Bitcoin Hash Rate Climbs
Bitcoin Hash Rate Hits New All-Time-High
The previous record was broken in the second half of June, when bitcoin’s hashrate reached 65.19 TH/s and growth has steadily continued since then.
Hash rate is the number of calculations that a given hardware or network can perform every second. It is a very important parameter for miners, as a higher hash rate will increase their chances of solving the mathematical problem, sealing off the block and collecting their reward. A higher network hashrate also increases the amount of resources needed for performing a 51% attack, making the network safer.
Increases in the network’s hash rate also often mean that its energy consumption increases. Still, cryptocurrency investment products and research firm CoinShares recently estimated that 74.1% of bitcoin mining is powered by renewable energy.
As Cointelegraph previously reported, the period after September 2018 — during the so-called “crypto winter” — proved to be a retrograde step for the bitcoin network. At the time, the network’s hashrate decreased for the first time ever.
In June news broke that bitcoin’s mining difficulty has reached an all-time high, demonstrating the increasing competition for block rewards between miners. Bitcoin Hash Rate Sets,Bitcoin Hash Rate Sets,Bitcoin Hash Rate Sets
Bitcoin Network Hash Rate Hits 80 Quintillion For The First Time
Bitcoin (BTC) has passed another network performance milestone this week as the largest cryptocurrency’s hash rate hit a new record high.
Bitcoin Secured By 80 Quintillion Hashes Per Second
Data from monitoring resource Bitinfocharts confirmed Bitcoin’s hash rate exceeded 80 quintillion SHA256 hashes per second Aug. 8, the first time such a level has been reached.
Hash rate refers to the amount of computing power used to validate Bitcoin transactions. The more power, the costlier it becomes for malicious actors to attack the network.
As Cointelegraph reported, hash rate has set multiple new all-time highs throughout recent months, reversing a downward trend which characterized the second half of the 2018 Bitcoin bear market.
The metric is one of many to set personal bests this year; difficulty and volume, among others, have also done so.
Greater Security Boosts Investor Confidence
Network strength in turn contributes to the overall bullish sentiment among Bitcoin proponents, who note that during the cryptocurrency’s all-time price high in December 2017, the same metrics were markedly lower.
As such, the argue, Bitcoin is better equipped for growth now than then, or at any point in its history.
When that growth will kick in remains uncertain, with opinions nonetheless coalescing around next May’s block size reward halving. Prior to that, miners will ensure that markets keep above the lows seen in the past year, with one analyst putting the floor at around $6,500.
Bitcoin Is Using Less Energy Despite Record Hash Rate, New Data Shows
Bitcoin (BTC) energy consumption is becoming rapidly more efficient, new data shows as hash rate continues to hit record highs.
Record Hash Rate With Less Power
Data from aggregator Statista accessed on Sept. 5 showed that despite more computing power being dedicated to Bitcoin mining, less electricity is required to fuel it.
According to one chart, energy consumption as of July was 69.79 terawatt hours per year. In July 2018, the figure was 71.12 terawatts, while hash rate was almost 60% lower than at present.
As Cointelegraph reported, hash rate measures the overall computing power involved in Bitcoin transaction processing. The metric passed 80 quintillion hashes per second in August, and currently lies at just under 90 quintillion. In July 2018, the number was around 40 quintillion.
Bitcoin Mining Gets Eco-Friendly
The data thus fits into the overall trend for miners to become more ecologically aware. As Bitcoin prices recovered this year, multiple operators announced attempts to improve efficiency.
A study in June found that three-quarters of Bitcoin mining activity is powered by renewable energy sources.
Hardware manufacturers have further sought to develop new devices with greater capabilities and lower energy demands, such as Bitmain’s 7nm Antminer, which debuted last November.
Electricity nonetheless remains a popular topic among third parties, some of which allege the industry’s consumption makes it a morally questionable activity.
Bitcoin Hash Rate To Hit A Milestone 100 Quintillion For The First Time
Bitcoin (BTC) is aiming for a new network record as its hash rate is just inches away from hitting three figures.
Bitcoin Hash Rate Nearing 100 Quintillion
Data from statistics and wallet provider Blockchain published on Sept. 8 shows that as of that date, Bitcoin’s hash rate has topped 94 quintillion hashes per second.
A record in itself, the number is now set to reach 100 quintillion for the first time in Bitcoin’s history, commentators suggest.
As Cointelegraph has explained, hash rate refers to the overall computing power involved in processing Bitcoin transactions. The more power, the more secure and profitable the Bitcoin network is.
Hash rate spent six months in recession during the second half of 2018, before staging a dramatic comeback in January. Three months later, Bitcoin price followed suit, rising from $3,500 to local highs of $13,800.
Keiser: Bitcoin Gains Will Come At Fiat’s Expense
According to RT host Max Keiser, price traditionally follows hash rate in bull runs. Now, he says, it is fiat currency which will start feeling the strain due to Bitcoin’s success.
“#Bitcoin hash set to break 100 Q. This will start to become a problem for fiat as data centers dedicated to maintaining fiat systems are pulled into the BTC black hole of true value,” he wrote on Twitter on Sunday.
The pace of change in Bitcoin likewise did not go unnoticed by Lightning Torch relay organizer Hodlonaut, who on Twitter noted the metric measured just 6 quintillion in September 2017.
“Today, hashrate increases with that same amount every 2-3 weeks,” he added.
BTC/USD meanwhile has yet to capitalize on network strength again. At press time, the pair traded sideways just below $10,200, having lost almost 4% over the past 24 hours.
Bitcoin’s Record Hash Rate May Hint At Price Gains To Come
With the hash rate or miner’s confidence hitting record highs, bitcoin’s three-day narrowing price range looks set to end with a bullish breakout.
A range breakout would open the doors to $10,956 – the bearish lower high created on Aug. 20.
A break below Friday’s low of $10,154 would confirm a range breakdown and could yield a sell-off to $9,855 (Sept. 11 low).
Bitcoin’s latest bout of consolidation may end up with bullish breakout, as a key metric of miner confidence has hit all-time highs.
The top cryptocurrency by market value has clocked lower daily highs and higher daily lows over the last three days and is currently trading at $10,300 on Bitstamp, little changed on a 24-hour basis.
The cryptocurrency has charted the narrowing price range amid a surge in non-price metrics including a rise in the network’s hash rate – a measure of the computing power dedicated to mining bitcoin.
Notably, the two-week average hash rate reached a record high of 85 exahashes per second (EH/s) around 19:00 UTC on Friday. Further, mining difficulty – a measure of how hard it is to create a block of transactions – also jumped to a new all-time high of nearly 12 trillion.
Hash rate can be considered a barometer of miners’ confidence in the bitcoin price rally.
After all, they are more likely to dedicate more resources to the computer intensive process that secures the network and processes transactions if they are bullish on price. Miners would likely scale back operations if a price slide is expected.
Hence, many observers, including the likes of Changpeng Zhao, CEO of Binance, and former Wall Street trader and journalist Max Keiser believe prices follow hash rate.
Zhao tweeted on Friday that, a rising hash rate means “more miners are investing in BTC,” while few other observers stated that sellers should think twice before betting against the most secure blockchain (the higher the hash rate of a cryptocurrency network, the more expensive it is to attack).
It is worth noting, though, that the market is divided on the relationship between price and hash rate.
Some observers believe the hash rate follows price and the metric’s stellar performance represents overtly exuberant miners.
That said, the price is likely to follow the hash rate this time, as over-exuberance is typically observed at market tops or near record highs. As of now, BTC is down almost $10,000 from the record high of $20,000 reached in December 2017.
Further, with the next reward halving (supply cut) due in less than a year, market sentiment is quite bullish. The sustained uptick in miners’ confidence is more likely to draw fresh bids, possibly leading to a positive feedback loop.
Bitcoin has charted (above left) back-to-back inside bar candlestick pattern on the daily chart over the last three days. The first inside bar appeared on Friday as that day’s high and low fell within Thursday’s trading range. The second and the third inside bar candle was created on Saturday and Sunday, respectively.
Inside bars indicate consolidation and lack of volatility, often ending with an explosive move on either side. A break below the first inside bar’s (Friday) low of $10,154 would imply range breakdown and could yield a stronger sell-off to levels below $9,855 (Sept. 11 low).
A break above Friday’s high of $10,458 would imply range breakout and open the doors to $10,956 (July 20 high).
The falling wedge breakout confirmed on the 4-hour chart (above right) last week is still valid. So, the probability of range breakout is high.
Bitcoin Hash Rate Hits 102 Quintillion In Historic Network Milestone
Bitcoin’s (BTC) network hash rate has passed a record 102 quintillion hashes for the first time in history in a historic milestone for the cryptocurrency.
Bitcoin Adds Another Zero To Hash Rate
As data from monitoring resource Blockchain confirmed on Sept. 18, hash rate, ultimately a function of how secure the Bitcoin network is, has reached a high of 102.8 quintillion hashes.
The achievement follows a string of records for the metric this year, Cointelegraph reporting on various stages of its expansion over the past few months.
Hash rate refers to the amount of computing power involved in processing Bitcoin transactions. The higher the number of hashes, the more implied competition there is among miners to obtain the block reward.
Since December 2018, the hash rate has progressed from its recent low of 31 quintillion hashes per second, equating to the progress of 230%.
Bitcoin Proponents Eye Price Implications
Current growth has excited commentators, despite coming in tandem with a moderate decline in Bitcoin price.
As many noted, new upward action for hash rate tends may hint at future price growth. Hash rate began growing in January after several months of decline, with price then following in April.
Commenting on the current rate of growth, Lightning Torch organizer Hodlonaut said the figures spoke to underlying confidence among miners.
“Last readjustment period (2016 blocks, or around 2 weeks) increased 10.38%. We are about half way through the current readjustment period, and on track for another 11.85% increase,” he forecast.
Others have already given more bullish predictions. Max Keiser, a firm believer in Bitcoin’s prowess over altcoins, has frequently doubled down on his depiction of giant surges in both hash rate and price in the near future.
Bitcoin Miners Get Bullish As Difficulty Set For 60% Quarterly Growth
Bitcoin (BTC) will see its mining difficulty grow by 60% in the third quarter of 2019, according to new data.
Bitcoin Metrics Show Big Competition In Play
Uploading historical and future projections to Twitter on Sept. 19, well-known analyst Kevin Rooke said difficulty had already expanded at an average of 42% each quarter since 2016.
With the exception of the fourth quarter of 2018, the floor of the Bitcoin bear market, growth has been positive consistently ever since. This year’s increases have been almost vertical compared with the previous period.
“Difficulty is projected to grow 60% this quarter, and it was already at an all-time high when Q2 ended,” he wrote in accompanying comments.
Difficulty refers to the amount of effort required to solve the complex equations which verify blocks of Bitcoin transactions and unlock block rewards.
The more competition there is on the Bitcoin network, the more difficulty increases; a lack of interest conversely sparks a decrease in difficulty to incentivize participation.
Bitcoin Metrics Stronger Than Ever Before
As Cointelegraph reported, Bitcoin mining difficulty is just one of the fundamental technical indicators to beat expectations this year.
Just this week, it was Bitcoin’s hash rate which hit all-time highs yet again, passing 102 quintillion hashes per second for the first time ever.
According to proponents, such progress precedes a similar jump in Bitcoin prices, this nonetheless evading markets so far in the third quarter.
“Someone is confident,” Lightning Torch organizer Hodlonaut summarized on Thursday.
Bitcoin Network Hash Rate Mysteriously Flash Crashes by 40%
Data from Coin.dance — corroborated by other sources [insert links] — indicates that the network’s hash rate plummeted yesterday from over 98,000,000 TH/S to 57,700,000 TH/s.
Mystery Flash Crash Remains Unexplained
The flash drop remains unexplained as of press time and is all the more striking given the Bitcoin network’s record-breaking string of new all-time high hash rates throughout summer.
Just five days ago, Cointelegraph had reported that Bitcoin’s hash rate had passed a record 102 quintillion hashes in a historic milestone.
As previously noted, the hash rate of a cryptocurrency — sometimes referred to as hashing or computing power — is a parameter that gives the measure of the number of calculations that a given network can perform each second.
A higher hash rate means greater competition among miners to validate new blocks; it also increases the number of resources needed for performing a 51% attack, making the network more secure.
By press time, Bitcoin’s hash rate has somewhat recovered back to almost 88,300,000 TH/s — yet remains well below its earlier records.
Throughout summer, cryptocurrency analysts had argued that the network’s record-breaking streak of all-time hash rate highs was a bullish indicator for the top coin’s price performance.
In A Tweet Posted This August, Bitcoin Investor Max Keiser Had Claimed That:
“Price follows hashrate and hashrate chart continues its 9 yr bull market.”
Back in November 2017, Bitcoin had seen a sudden hash rate downturn of almost 50%, accompanied by slowed transaction processing times, a price dip, and even miners’ short-lived switch over to the forked network, Bitcoin Cash (BCH).
What Crash? Bitcoin Hash Rate Doubles In 24 Hours Despite Price Drop
Bitcoin (BTC) has already dispelled myths its hash rate suffered a 40% drop this week, reaching new all-time highs just days afterwards.
What Hash Crash?
As data from monitoring resource Coin Dance confirms, after the hash rate metric dipped from 104 quintillion hashes per second (h/s) to 57 on Sept. 23, it immediately reversed.
On Sept. 24, it doubled, reaching 114 quintillion h/s, just a touch away from the all-time highs of 121 quintillion h/s seen ten days previously.
As Cointelegraph reported, commentators initially appeared scared when hash rate dropped. Long considered a measure of commitment to the Bitcoin mining process, what appeared to be a sudden exodus of computing power sparked alarm.
That feeling was compounded as BTC/USD itself shed 15% a day later — a common theory among commentators is that price action follows hash rate movements.
Dispelling The Myths On Bitcoin Health
Nonetheless, technical sources subsequently explained that the hash rate charts available online in fact give little idea of computing power involved in Bitcoin.
Hash rate, they explained, is essentially unmeasurable, and the statistics are simply an estimate.
Factors such as slow block times can disproportionately affect results, leading to overly ominous results such as this week’s fake crash, they added.
If the latest statistics are reliable, however, Bitcoin’s hash rate remains on its upward trajectory, around all-time highs. This contrasts with its drop in price: at press time Friday, BTC/USD was down 21% versus seven days ago.
$10M Mining Farm Fire Takes Blame As Bitcoin Hash Rate Wobbles
The Bitcoin (BTC) network experienced fresh turbulence on Sept. 30 while evidence emerged of a fire destroying $10 million worth of mining rigs.
A Video Of Alleged Bitcoin Miner Fire Emerges
According to Marshall Long, one of the first active Bitcoin miners, mining company Innosilicon’s giant data center began burning on Monday. Details remain sparse, but a video appeared showing the machines reportedly continuing to run despite being on fire.
Dovey Wan, a founding partner at crypto asset holding company Primitive Ventures, added that the total worth of equipment involved circled around $10 million.
At press time, Innosilicon had not made any public comments, either officially or on social media.
Hash Rate Struggles After Highs
Commentators on social media were swift to air concerns that the blaze was to blame for a reported drop in Bitcoin’s hash rate.
On the day it occurred, estimates of network computing power involved in processing transactions dropped from 86 quintillion hashes per second (h/s) to 82 quintillion h/s.
As noted previously, however, hash rate estimates provide only a limited view of Bitcoin’s overall health. Last week, what appeared to be a 40% hash rate plunge, later was widely ignored by technical graphs.
As Cointelegraph reported previously, the rainy season in China’s northwestern Sichuan province has spelled disaster for at least one more Bitcoin mining farm on Aug. 20.
Bitcoin’s White Paper Turns 11 As Network Passes Milestones
Happy Birthday, Bitcoin.
Halloween 2019 marks the eleventh anniversary of the release of the white paper for the first fully decentralized, peer-to-peer electronic cash by anonymous creator(s) Satoshi Nakomoto. In the wake of the Great Recession of 2007–2009, a single email for a small collective of cypherpunks proved to be the catalyst for a monetary revolution.
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” Satoshi wrote to open his email, attaching the bitcoin white paper.
Rolling out bitcoin’s code the following January with the mining of the genesis block, bitcoin’s first year was inauspicious at best. Eleven years later, however, most metrics point towards a bright future. The white paper’s birthday month proved to be one of the best yet.
October In Review
Looking at the numbers, the last 10 months have given bitcoin hodlers much to be thankful for; October, even more so.
Bitcoin’s price jumped some 40 percent in 24 hours on Oct. 26, briefly breaking out to $10,000. As ARK Invest analyst Yassine Elmandjra wrote on Twitter, the price movement has only happened three times in bitcoin’s history.
Bitcoin’s hash rate – a good metric for the amount of energy put towards mining bitcoin’s and securing the network – hit an all-time high at over 110 exahashes per second (EH/s) on Oct. 23.
As recent initial public offering filings for mining giants Canaan and Bitmain show, bitcoin mining has gone a long way since the early days of CPU farming, and is now big business.
Bitcoin also just mined its 18 million coin, leaving a mad scramble for the last 3 million. As halvings continue to occur every 210,000 blocks or so, the last coin won’t be minted till 2140.
Bitcoin fees collected reached $1 billion in total earlier this week too, right in time for today’s celebrations.
Bitcoin Mining Difficulty Sees Biggest 2019 Drop As Hash Rate Spikes
Bitcoin (BTC) mining difficulty adjusted downwards more than at any time since its 2018 price low on Nov. 8, data shows.
As noted by entrepreneur and cryptocurrency commentator Alistair Milne on Monday, difficulty fell by around 7% after the network’s latest readjustment.
Difficulty Reveals Bitcoin Network Maneuvering
Mining difficulty refers to the effort required for miners to solve the equations necessary to validate transactions on the Bitcoin network. A higher difficulty implies competition for block rewards is higher, while drops incentivize more participation.
The mechanism functions as a self-stabilizing device for Bitcoin, ensuring network security is sufficient even when price or network activity drops significantly.
From its recent bottom of 5.1 trillion in December 2018, when BTC/USD traded at $3,100, the difficulty has increased incrementally throughout 2019. In late October, the metric reached an all-time high of 13.7 trillion and has now corrected to 12.7 trillion, data from monitoring resource Blockchain shows.
“Seems to confirm the cost of mining (on average) is ~$8000,” Milne summarized.
Hash Rate Retakes 100 Billion Hashes Per Second
At the same time, Bitcoin’s network hash rate saw renewed bullish upside on Monday, having similarly seen a period of contraction in recent weeks.
At press time, hash rate, which is an estimation of how much computing power is dedicated to validating transactions, had passed 100 quintillion hashes per second once again.
The move follows news that Argo Blockchain, a major Bitcoin mining provider, brought 500 new Antminer S17 rigs from mining giant Bitmain online over the past week.
The United Kingdom-based firm now has around 7,000 miners, and by the end of Q1 2020 plans to increase the total to 17,000.
As Cointelegraph reported, mining companies overall remain buoyant about the future profitability of the sector. Canaan Creative, another significant player, is reportedly set to undergo a $400 million initial public offering, or IPO, this month.
At the same time, Bitmain is going ahead with the expansion of a Texas mining farm which officials say could ultimately become the largest in the world.
‘Incredible’ Bitcoin Hash Rate Boom Will Destroy Altcoins: Tone Vays
Bitcoin (BTC) will cement its dominance over the cryptocurrency market next year in a fresh blow to altcoins, a veteran trader has said.
In the latest episode of his Trading Bitcoin YouTube series on Dec. 22, Tone Vays warned that altcoin traders faced even worse conditions as 2020 begins.
Dominance On Way To 98%
“One of my predictions for 2020 is going to be Bitcoin dominance in 2020 reaching 85%,” he stated.
Continuing, Vays explained that Bitcoin further strengthening its market position would echo gains it already secured this year — dominance is currently 69% versus 51% in January. As a percentage against its position in January 2018, Bitcoin dominance is up 87%.
For Him, In The Long Term, The Figure Could Expand To See BTC All But Usurp Altcoins Altogether:
“I think Bitcoin dominance has one more push. The way we went from about 50% to 70% in 2019 — I think we have another 10-15% in Bitcoin to gain on the sh*tcoins as it continues towards 90% and 95% and then 98%.”
Vays: BTC Hash Rate Growth Is “Incredible”
The fundamental factor driving Bitcoin’s success would be the hash rate strength. Since BTC/USD hit its all-time high in December 2017, the hash rate has grown by 800%, something Vays describes as “incredible.”
Hash rate refers to the overall computing power miners choose to devote to validating the Bitcoin blockchain. Despite lower prices, interest and competition among miners continue to expand, also resulting in a more secure Bitcoin network.
“Show me another sh*tcoin that has this kind of hash rate growth,” he argued.
Famously unconvinced about the potential role for alternative cryptocurrencies, Vays went on to predict that Bitcoin’s Liquid sidechain product would ultimately “destroy” the utility of competitors.
Specifically, these are Ethereum, EOS and Cardano, all of which have accompanying altcoins for their platforms in the top twenty cryptocurrencies by market cap.
Vays has not always been so clear cut on Bitcoin’s outlook. Responding to a mainstream media interview covering investor Tim Draper’s $250,000 Bitcoin price prediction, he claimed such bullish forecasts had made him “more bearish.”
By contrast, he told crypto media network BLOCKTV on Sunday, a $50,000 BTC/USD price by 2023 was still reasonable.
Bitcoin Kicks Off 2020 More Secure Than Ever As Hash Rate Hits Record
Bitcoin (BTC) has already hit a new record in 2020 as the cryptocurrency’s network hash rate once again topped previous all-time highs.
Data from multiple monitoring resources including Blockchain and Coin Dance confirmed hash rate was higher than ever on the first day of the new year.
Estimates Point To An All-Time High For BTC Network
A measure of the computing power devoted to validating the Bitcoin blockchain, hash rate spent much of 2019 in a continuous growth cycle. Only for a brief period in Q3 did the upward trend level off.
Strong hash rate suggests Bitcoin is a more appealing proposition for miners — more mining power translates into better network security and robustness against potential attacks.
According to Blockchain, the metric hit 119 quintillion hashes per second (h/s) on Jan. 1.
Markets Await “Price Follows Hash Rate”
The reason for the variation lies in the fact that the hash rate is all but impossible to measure in real terms. Resources can only analyze recent network activity and from that create an estimate of presumed hash rate.
In September, what appeared to be an overnight 40% drop in hash rate was subsequently attributed to the way it is calculated.
The recent records have further come independent of Bitcoin price action. BTC/USD fluctuated between $3,100 and $13,800 last year, but the hash rate trend endured.
Commentators, including Keiser Report host Max Keiser, have also claimed that hash rate highs will ultimately produce new Bitcoin price highs.
At press time, the pair traded at just above $7,100, down around 3% over the three days covering the hash rate record.
Bitcoin has recently set other technical records, which Cointelegraph reported last week.
Bitcoin Mining Power Hits Fresh All-Time High
Bitcoin’s hash rate reached record highs this week amid rising prices and anticipation of the miner reward halving later this year.
Based on a seven-day average, the hash rate has risen sharply from approximately 93 exahashes per second (EH/s) on Dec. 30 to more than 106 EH/s on Jan. 5. The best day overall was Jan. 1 when the hashing power exceeded 119 EH/s, surpassing the previous record of 114 EH/s set back in October.
Bitcoin’s hash rate has increased considerably over 2019, rising from a weekly average of 40 EH/s at the beginning of the year to 80 EH/s by September.
That shift corresponded with the rise in bitcoin’s price from roughly $4,000 to more than $10,000 over the same timeframe. The hash rate first crossed the 100 EH/s milestone on Sept. 26, but it wasn’t until late October that it stayed above 100 EH/s for more than a day.
A plus-100 EH/s rate has become an increasingly frequent sight, with only one day so far this year reporting under the new benchmark.
Hash rate is a measure of the processing power dedicated to a blockchain. A high hash rate means more miners are working on the bitcoin network, suggesting it is increasingly economically viable at both the current bitcoin price and difficulty level. A report published in September predicted bitcoin’s two-week average hash rate would cross 100 EH/s at the end of 2019.
Bitcoin’s difficulty level automatically adjusts to ensure block time stays broadly at around the 10-minute mark, regardless of how many miners are working on the network. It adjusts every two weeks, the last being on Jan. 1 when it increased by 6.75 percent, the largest since September.
Plummeting cryptocurrency prices in 2018 forced many miners to shut up shop, with only the largest able to remain profitable. The industry faced an existential crisis as recently as last April when a government agency in China – home to more than two-thirds of all bitcoin mining operations – called mining “undesirable.”
However, the situation looked brighter for miners last year as the bear market faded. More than half a million new application-specific integrated circuit (ASIC) rigs are estimated to have come online in Q3 2019, following a summer in which the bitcoin price more than doubled.
In recent days, bitcoin prices have taken an upturn, rising nearly 10 percent from lows near $6,850 seen on Friday. The rise may have set the cryptocurrency up for a bullish trend shift, charts suggest, further encouraging miners.
2020 is set to be a crucial year for many miners looking to increase their capacity. Bitcoin’s block reward is expected to halve to 6.25 BTC in the coming months. While Bitmain is expected to make job cuts in anticipation of a drop in revenue, according to Chinese media, other companies are significantly scaling their operations.
U.K.-listed mining firm Argo Blockchain announced Thursday it had acquired more than 3,600 new bitcoin ASICs, more than quadrupling its total mining capacity. The news caused the company’s share price to rise by 6 percent on the London Stock Exchange.
It’s Never Been Harder To Mine Bitcoin As Hash Rate Hits New Highs
The mean hash rate of the Bitcoin (BTC) network has hit new all-time highs to mark the cryptocurrency’s latest technical achievement, fresh data suggests.
Compiled by monitoring resource Glassnode, a new analysis of Bitcoin’s historical hash rate shows that on Jan. 7, the mean value reached 119 quintillion hashes per second — its best ever at the time.
Consensus On BTC Hash Rate Record
Hash rate refers to the amount of computing power miners are using to validate the Bitcoin blockchain. The more power, the more notionally secure the blockchain is. A large hash rate can also be taken as a statement of the attractiveness of mining for participants.
Glassnode’s reading derives from the one-day moving average hash rate calculation. While the hash rate is impossible to measure exactly, the data supports other estimates showing the metric hit new records in recent weeks and months.
As Cointelegraph reported, various statistics resources have confirmed the uptrend, with the highest reading approaching 150 quintillion hashes per second this week.
Progress has been swift. According to Glassnode, the mean hash rate low of 36 quintillion hashes per second — which formed the basis for recent growth — occurred in late April 2019.
Difficulty Set For Another 6% Surge
This year, meanwhile, Bitcoin has already exhibited multiple signs a bullish transformation is once again underway. Alongside hash rate, commentators have highlighted increased trading activity among Bitcoin futures investors.
Mining difficulty, which had previously been in decline, is now increasing. Last week, the metric progressed 6%, while another 6-7% is on the cards at the next adjustment in nine days’ time.
Anticipation has also been building around Bitcoin price action for the coming twelve months, with industry figures going on record to predict new all-time highs for BTC/USD before 2021.
Bitcoin Hash Rate Hits New All-Time High As Miners Shun Price Drop
Bitcoin (BTC) has hit a new all-time high in terms of hash rate despite dropping almost 12% last week, data suggests.
According to various resources tracking hash rate growth on the Bitcoin network, the metric was circling its highest value ever as of March 1.
Bitcoin Network Hits Up To 136 Quintillion Hashes Per Second
Hash rate refers to the combined computing power that miners are dedicating to validating transactions on the Bitcoin blockchain. The higher the value, the more power there is — this implies that miners believe in the profitability of mining, and have a desire to increase network security.
Data from monitoring resource Bitinfocharts put Bitcoin’s hash rate at just over 120 quintillion hashes per second on Sunday, the latest day for which figures are currently available.
Another monitor, from wallet provider Blockchain, put the figure at closer to 140 quintillion hashes per second after picking up a spike in activity over the weekend.
As Cointelegraph reported, hash rate tools can only estimate activity. In 2019, what many thought was a sudden drop in hash rate was subsequently shown not to be miners exiting Bitcoin.
Analysts Await Halving Flashpoint
In May, when the new Bitcoins released to miners each block will halve from 12.5 BTC to 6.25 BTC, expectations are high that increased competition will boost hash rate still further.
PlanB, the analyst who created the highly-accurate stock-to-flow price forecasting model for Bitcoin, recently reinforced his belief in the theory.
For him, the 2020 halving will produce similar effects to the 2012 and 2016 events — a catalytic impact on hash rate, difficulty and, of course, price.
Bitcoin Hash Rate Passes Record 150 Quintillion As Price Reclaims $9K
Bitcoin (BTC) miners have set a fresh all-time high in terms of computing power they are willing to dedicate to validating transactions.
Pomp: Hash Rate Shows BTC “Doesn’t Care About Anything”
According to data from monitoring resource Coin Dance on March 5, the Bitcoin network hash rate may have passed 150 quintillion hashes per second (h/s) for the first time ever.
Coming just days after its previous record, the hash rate has continued to grow. On Thursday, the metric hit 157 quintillion h/s — its best performance in history.
Hash rate is key to ensuring the security of the Bitcoin network, and also acts as an indication of its profitability for miners who validate the blockchain. In recent times, Bitcoin has exhibited consistent records in this respect, regardless of whether its price has been rising or falling.
Despite a 12% price drop last week, miners appeared completely unfazed, something which commentators in the space were quick to celebrate.
“This has happened in the face of a potential pandemic, absolute chaos in the public markets, and helicopter money being distributed in Hong Kong,” Morgan Creek Digital co-founder, Anthony Pompliano (known as Pomp in crypto circles), tweeted after hash rate hit 136 quintillion h/s.
“Bitcoin doesn’t care about anything other than doing what it was built to do.”
Hash rate calculations are at best estimates, and significant movements up or down should not be taken as an indication of exact miner participation.
Setting The Stage For Price (Again)
Others, notably RT host Max Keiser, previously noted that hash rate achievements tend to come in advance of copycat moves in price.
A return below $9,000 has failed to dent the confidence of many Bitcoin supporters engaged in technical analysis of the largest cryptocurrency. Among them is statistician Willy Woo, who this week delivered a $135,000 price target for BTC/USD.
Set to appear at some point during its current bull cycle, Woo described such levels as a “common-sense prediction.”
BTC/USD reentered the $9,000 zone on Thursday after trading lower for more than a week. Daily gains totaled 3.2% at press time.
Bitcoin Hashrate Increases ⅓ in 2 Days — Will BTC Price Follow?
Bitcoin (BTC) hashrate has increased 33% in just two days while the price of Bitcoin trails behind.
BTC Price & Hashrate
Bitcoin hashrate has exploded from 91,290,582 TH/s on April 4 to 121,029,181 TH/s on April 6. Historically, Bitcoin hashrate and price have exhibited a very close relationship, with a 0.77 correlation.
This relationship makes sense considering that the hashrate represents, on the one hand, the production cost of Bitcoin for the miners and, on the other hand, the overall security of the Bitcoin network. In other words, the higher the total hashrate, the more expensive it will be for an adversary to take over the network. This decentralized trust is one of key values that Bitcoin possesses.
Will The Price Follow?
Over the same timeframe, the price of Bitcoin has increased only 0.92%. The rapid growth in hashrate comes on the heels of recent favorable adjustment in Bitcoin mining, which itself was precipitated by the previous drop in network hashrate.
If Bitcoin price/hashrate correlation remains constant, we can expect to see a significant price surge. However, these dynamics are further complicated by the impending halving of Bitcon block rewards, which is only 36 days away.
With everything else remaining constant, after the halving, miner revenue will also be halved. On the other hand, for miner revenue to remain at the same level, the price would have to double (holding mining efficiency constant). The recent surge in Bitcoin hashrate may indicate that the miners are betting on the second scenario.
37% Expect Bitcoin’s Hashrate To Be Higher After Halving: Poll
About 37% of the crypto community expects BTC’s hashrate to be higher 1 month after the block halving than it currently is.
About 37% of the cryptocurrency community expects Bitcoin’s (BTC) hashrate to be higher one month after the block reward halving than it currently is, according to a recent poll.
Cryptocurrency portfolio tracking application, Blockfolio, polled its users on April 27. They asked whether they believe Bitcoin’s hash rate will be higher or lower one month after the halving.
The Community Has A Positive Outlook
Blockfolio’s question was answered by over 8,000 users. Among the respondents, 37% believed that the hashrate would be higher, 29% that it would be lower, and 17% that it would be the same. The remaining 17% admitted that they did not know. Philip Salter, the head of mining operations at mining firm Genesis Mining, told Cointelegraph that new mining application specific integrated circuits, or ASICs, should help preserve Bitcoin’s hashrate post-halving.
Salter explained that to understand the impact of the halving on Bitcoin’s hashrate, one must know several important data points. How Bitcoin’s price will develop, how much miners will stop their activity due to reduced profitability, and how much hashrate will be added due to new hardware. He explained:
“There is a new generation of [mining ] on their way, which should come online shortly after the halving. So that by default will increase hashrate. […] It’s evident from the survey results that people are unsure how to answer these questions. But more people think that hashrate will go up, showing a bullish sentiment on the price and […] trust in the manufacturers to deliver on time.”
An Expert’s Prediction
Salter estimates that post-halving, the Bitcoin hashrate will be about 30% lower than it currently is if the price does not go up. If Bitcoin prices continue to go up on the other hand, he thinks the hashrate could stay stable after the block reward is reduced. He also noted that “much of the drop shouldn’t happen immediately, since miners can’t turn off instantly.” Still, he expects recovery to follow if the drop does happen:
“Midterm, the hashrate should recover quite quickly. Most [ASICs] that are turned off will be Bitmain S9, with an efficiency of around 90 W/TH. The new [ASICs] have ~30 W/TH, so can deliver three times more hashrate at the same power consumption. That gives us a good estimate of how much hashrate can increase without new farms being built. ”
Lastly, Salter expects Bitcoin’s network health to remain largely unaffected. He admitted that Bitcoin mining will slightly centralize due to less optimized operations stopping activity. The total electricity consumption will also decrease due to some operations halting. Still, he believes those changes will be only temporary. He says that new hardware will allow home miners to participate in Bitcoin mining again.
Bitcoin Cash (BCH) performed its own block reward halving earlier this month. Shortly after the halving, the network saw a 60% fall in hashrate, going from 4.36 EH/s to 1.6 EH/s in under a day. As a Cointelegraph analysis explained shortly after, the Bitcoin Cash halving decreased the network’s mining profitability and resulted in miners fleeing to competing blockchains.
Bitcoin Difficulty Sees Two-Year Record Surge As Hash Rate Mimics 2017
A giant 14.95% advance makes analysts confident as miners appear to balance increased costs to retain profitability.
The Bitcoin (BTC) mining difficulty has seen its biggest upward move for over two years after warnings over BTC price selling pressure.
According to data from on-chain monitoring resource BTC.com on June 17, the latest difficulty adjustment saw difficulty increase by 14.95% — the most since January 2018.
Bitcoin Difficulty Shoots Up 15%
The increase tops previous automated predictions, which just days ago suggested an increase of closer to 10%.
As Cointelegraph reported, the 15% figure almost entirely reverses the negative moves of the two previous adjustments of -9.29% and -6%.
Difficulty adjustments are an essential part of how Bitcoin functions. By regulating the effort and, therefore, cost needed to validate the blockchain, Bitcoin “takes care of itself” as a network, regardless of price action or miner participation.
As such, the cryptocurrency remains “hard” as money — and regardless of difficulty, its mining issuance remains the same.
Nonetheless, big upticks in difficulty have knock-on effects for miners in terms of cost. A higher difficulty could theoretically cause miners to sell in order to protect profitability.
On Wednesday, a day after the adjustment, the amount of Bitcoin sold by miners was roughly equal to the amount they created.
At press time, data from ByteTree reveals that in the past 24 hours, miners mined 781 BTC and sold 739 BTC — leaving a net gain of 42 BTC.
By comparison, miners managed to retain 263 BTC in the 24 hours to June 12, before the adjustment.
Hash Rate Gains Echo 2017
Along with difficulty recovering, Bitcoin’s network hash rate continues to remain above 100 EH/s after a significant recovery during May.
After the third block subsidy halving, which cut miner revenue by 50% overnight, hash rate — a measure of miner participation — tumbled to 90 EH/s.
Since then, bullish signs have returned as well as bear similarities to the run to $20,000 in 2017.
“Even after the mining subsidy was cut in half a month ago, more hashrate has joined the network than ANY TIME since the historic 2017/18 market bull run,” portfolio manager Blockfolio commented on Twitter about the difficulty adjustment.
Cointelegraph has already noted several ways in which the Bitcoin network’s current state mimics that of late 2018, immediately after the pit of its subsequent bear market.
Bitcoin’s Hash Rate Remains Flat Despite Major Price Rally
Bitcoin’s hash rate seems to be feeling the consequences of the drama at Bitmain.
Bitcoin (BTC) mining activity doesn’t seem to be reacting to the recent price rally that took the asset from approximately $9,000 in early July to almost $12,000 at time of publication.
According to data from Coinmetrics, hashrate spiked around July 7 and has remained largely flat amid fluctuations to the downside.
The hashrate represents the sum total of all miners attempting to find hashes that would create new valid blocks. There is generally a strong correlation between hashrate and price, as a higher BTC value increases the profit margins for each individual miner.
Since July, hashrate growth appears to have slowed down as the difficulty saw its first decline since early June. The trough in hashrate in mid-July, right after a significant difficulty increase, suggests that the balancing mechanism overshot. Difficulty was set too high for the available hashrate, slowing down block production.
While for most of July Bitcoin’s price remained steady, it crept up until a dramatic rally took it to highs of $11,500 in the second half of the month. Hashrate is sitting below all-time highs even as two weeks passed since the major leg of the rally.
During protracted rallies, hashrate tends to trail price as the supply of new miners is constrained by physical supply chains. However, the industry is currently experiencing additional disruptions stemming from the power struggle at Bitmain.
As Cointelegraph reported previously, shipments of new mining devices are being halted for at least three months.
News of the disruption broke amidst the ongoing struggle for company dominance between Bitmain’s two co-founders, Jihan Wu and Micree Zhan. Bitmain is one of the biggest manufacturers of ASIC devices, though competitors like MicroBT have been hot on their tail since the start of 2020.
As delivery of new devices is halted, a significant chunk of the ASIC supply is being restricted. At the same time, the rally rendered the old S9 series of miners slightly profitable at electricity prices of $0.04, according to Asicminervalue.
As Bitmain competitors scale their operations up and old miners are gradually turned back on, it is likely that the hashrate will resume growth.
Bitcoin Hash Rate Hits Record Average High With $12K Price In Sight
Bitcoin’s seven-day average hash rate passes 129 TH/s for the first time as the price continues to meet resistance at the $12K level.
As the price of Bitcoin continues to meet resistance passing $12,000, its hash rate has hit a new all-time high.
Data from Blockchain.com confirms that on Aug. 15, Bitcoin’s seven-day average hash rate reached a new peak of 129.075 TH/s. The achievement comes after two weeks of fairly stagnant hash rate growth, with the previous record set on July 28.
The hash rate is an estimate of how much computing power miners are devoting to processing Bitcoin (BTC) transactions. A higher average suggests that miners have more faith in profitability, so there is generally a strong correlation between hashrate and price.
Bitcoin surged past $12,000 twice in August before falling back into the same mid-$11,000 range. The BTC price continues to meet resistance at the $12,000 level, staying between $11,700-$11,900 range over the weekend.
Gold And Bitcoin Correlation
Bitcoin and gold may prove to have a stronger correlation in 2020 as many investors turn away from traditional finance during the Federal Reserve’s and other central banks’ response to the pandemic.
The price of gold recently passed $2,000 per ounce as Bitcoin may be in the early stages of its own bull run. Bitcoin investor Max Keiser said that billionaire Warren Buffett’s recent investment in gold could even push the price of BTC to $50,000.
Bitcoin Hashrate Surpasses All-Time High As Even 2014 ASICs Stay Profitable
Bitcoin’s hashrate is moving with the crypto’s price as old and new mining machines come online.
Bitcoin’s hashrate – a way to measure the total power consumption and mining output of the network – has topped a new all-time high.
The current mean hashrate of the Bitcoin network is 179.4 exahashes per second, according to data from Coin Metrics.
Ethan Vera, the CTO of North American mining firm Luxor, told CoinDesk the all-time high comes during a scramble for the semiconductor chips that power ASICs, along with a scramble for the machines themselves.
“The run up in bitcoin price paired with a shortage on ASIC chips has caused mining economics to turn favorably to miners, with many miners running at 85%+ mining margins,” he said.
“Miners are trying to get their hands on every machine possible, and even ASICs launched in 2014 are profitable. All of Luxor’s clients have all of their rigs plugged in and hashing including their oldest machines. There is little to no idle hashrate out there.”
Building on Vera’s comments, the all-time high is partly driven by previously backordered ASIC shipments finally reaching their North American buyers. Bitcoin’s mining industry has enjoyed surging growth over the past year, as big players continue to finance bulk orders of ASIC miners to the tune of the tens of thousands of units.
This all-time high is partly driven by previously backordered ASIC shipments finally reaching their North American buyers. Bitcoin’s mining industry has enjoyed surging growth over the past year, as big players continue to finance bulk orders of ASIC miners to the tune of the tens of thousands of units.
The hashrate high also comes in spite of the Bitcoin network’s recent 6% upwards difficulty adjustment (mining “difficulty” is a self-referencing score wherein 1 indicates the easiest mining conditions; Bitcoin’s current difficulty is 23.1 trillion).
The price of bitcoin has fallen roughly 2% Tuesday to just above $58,000.
Chinese Mining Pools’ Hash Power Plummets Amid Regional Blackouts
Blackouts for safety inspections in China’s Xinjiang region have significantly impacted the hash rate of many top Chinese Bitcoin mining pools.
The hashing power of top Bitcoin mining pools located in Northwest China appears to have plummeted due to a regional blackout to enable safety inspections.
The news was reported by Wu Blockchain, the author of Chinese crypto newsletter Wublock, who noted significant drops in the hash rate of several major pools — with Antpool crashing 24.5%, Binance Pool dipping 20%, BTC.com falling 18.9% and Poolin dropping by 33%.
The hashrate of Bitcoin mining pools plummeted in 24 hours. Antpools fell by 24.5%, https://t.co/1YRYr58dLy fell by 18.9%, Poolin fell by 33%, Binance pools fell by 20%. The reason is that Northwest China is undergoing a complete blackout for safety inspections. pic.twitter.com/vaWgYsMEFH
— Wu Blockchain (@WuBlockchain) April 16, 2021
According to an article on Chinese media outlet Wu Talk, the region of Xinjiang is currently experiencing a “comprehensive power outage safety inspection.”
The inspections follow a recent flooding accident at a coal mine in Xinjiang that saw 21 miners temporarily trapped at three different locations. The mine was swamped in a sudden flood while making technical upgrades, resulting in communication interruptions and power outages underground. Nearly 1,500 rescue personnel were deployed to the mine to assist with the emergency.
Xinjiang is a major source of global Bitcoin hash rate, with the Cambridge Bitcoin Energy Consumption Index, or BECI, estimating the region currently represents nearly roughly 36% of China’s combined hashing power. With China comprising two-thirds of global mining power, BECI estimates Xianjian to comprise 23.3% of the global hash rate.
According to Ycharts, the outages appear to have driven a roughly 2.2% drop in the Bitcoin network’s combined hash rate in the past 24 hours, which has slid from 169.4 million terahashes per second, or TH/s, to 165.8 TH/s as of this writing.
Signs The Bitcoin Hash Rate Is Starting To Move Away From China
The U.S. is slowly increasing its share of the Bitcoin hash rate.
Although the majority of Bitcoin (BTC) mining is still based in China, there are signs it is beginning to shift elsewhere.
Chun Wang, the co-founder of one of Bitcoin’s largest mining pools, F2Pool, reported that China represented less than half of Bitcoin’s hash rate during April 2020. Wang noted it was the first time the pool had seen Chinese miners represent a minority of the hash rate in its eight years of operation. “The shifting is real,” he said.
Here at @f2pool_official, in April 2021, the first month in our 8 years of operation, we have seen more $BTC hashrate coming from outside of China than from the inside. The shifting is real. https://t.co/nf2gBy62re
— Chun @ dogecoin.org (@BocaChicaDoge) May 3, 2021
Wang reposted data published April 22 by Digital Currency Group’s Barry Silbert, which revealed that United States-based Bitcoin mining pool Foundry had climbed to rank among the top five pools globally during April, commanding a 7.6% share of the hash rate.
“Bitcoin hashrate is quickly shifting from China to North America,” Silbert claimed. The leading pool remains AntPool, which is operated by Chinese mining hardware manufacturer Bitmain, with an 18.6% share of the total hash rate.
The University of Cambridge calculated that China’s mining dominance was around 65% in April 2020. Noting those figures in January 2021, BTC mining publication Miner Daily estimated China’s share had fallen to 55% of BTC hashing power by the start of this year, with the U.S. accounting for 11%.
On April 30, Cointelegraph reported that China’s crypto mining operations may be set for stricter regulations in the future, which could further fuel the country’s hash rate exodus. China has also recently been examining miners’ power usage in light of its own carbon commitments.
In late February, it was reported that authorities of the Chinese autonomous region of Inner Mongolia proposed closing down all local mining facilities to reduce energy consumption in the region. The region accounts for as much as 8% of the global hash rate.
In an article on Wednesday, Bitcoin podcast host Marty Bent said that the F2Pool findings are a confirmation of a trend in the mining world of hash rate production becoming more geographically distributed.
He added that this would help dissipate some of the “China controls mining” FUD surrounding the potential for the country’s central government to attack the network.
“It is great to have some data coming from Chinese pools that proves the percentage of overall hashrate production is being reduced within China’s borders.”
The FUD surrounding Bitcoin’s energy consumption and environmental impact may also reduce as more mining operations switch to renewable energy, especially in the U.S., which has tighter regulations.
According to a Nasdaq report on Tuesday, Texas has become a mecca for Bitcoin mining farms due to its low energy costs and the fact that the majority comes from renewables, such as wind and solar.
Bitcoin Hash Rate Hits 8-Month Low As Chinese Miners Power Down
Bitcoin’s hash rate plummets to roughly 91 EH/s as Sichuan miners close up shop.
Bitcoin’s (BTC) hash rate has fallen to its lowest levels since early November as mining operations in China start unplugging.
Bitcoin’s network hash rate, a measure of its computational horsepower, has slumped 46% since its peak level in mid-May. According to Bitinfocharts, Bitcoin’s hash rate is currently 91.2 exahashes per second (EH/s), close to half of its 171.4 EH/s high posted less than six weeks ago.
Bitinfocharts has also reported a drop in mining profitability from a peak of $0.449 per day per terahash per second to current levels of $0.226 over the same period.
Bitcoin’s hash rate has not been this low for eight months, last creeping below 90 EH/s on Nov. 3, 2020. A higher hash rate means greater competition among miners to validate new blocks, which also increases the scale of resources required to perform a 51% attack, thus making the network more secure.
The slump in hash rate and mining profitability is due to the ongoing crackdown from Chinese authorities on Bitcoin mining facilities across the country. Over the weekend, images of major mining pools in China’s Sichuan province being shut down were shared across social media.
We gonna witness a history in bitcoin mining tonight, all mining farms (about 8m kw electricity load) will shutdown at 12pm Beijing time tonight, Harare rate already dropped significantly after sichuan gov announce shut down bitcoins mining farms in Sichuan. pic.twitter.com/xRfqMCgWY1
— Molly (@bigmagicdao) June 19, 2021
On Friday, authorities in Ya’an City — a prefecture-level city in the western part of Sichuan — ordered local Bitcoin mining operations to shut down. In late 2019, CoinShares estimated that Sichuan hosted more than half of the global hash rate, attracting miners with its cheap and seasonally abundant hydropower.
On June 12, Yunnan provincial authorities also issued a notice ordering an investigation into the alleged illegal use of electrical power by individuals and companies involved in Bitcoin mining.
According to a CNBC report published June 15, Castle Island Ventures partner Nic Carter noted Bitcoin’s hash rate was dropping, speculating, “It appears likely that installations are being turned off throughout the country.” In early May, Cointelegraph reported that there were already signs that Bitcoin’s hash rate was starting to leave China.
Carter predicted at least half of Bitcoin’s entire hash rate will leave China over time.
North America, particularly the state of Texas, has become one of the top destinations for what has been dubbed the “great mining migration” due to favorable legislation and an abundance of low-cost renewable energy.
Hashing Out A Future: Is Bitcoin Hash Rate Drop An Opportunity In Disguise?
China’s crackdown on Bitcoin mining sparks a restructuring of the distribution of the ecosystem, impacting the hash rate in the short run.
China’s crackdown on Bitcoin (BTC) mining operations has led to a significant drop in the network’s hash rate, but industry participants believe it presents an incredible opportunity for the wider mining ecosystem.
China has long been a major contributor to the Bitcoin mining space, at times accounting for more than 70% of the global hash rate of the world’s preeminent cryptocurrency. That was up until June 2021, when the Chinese government moved to shutter a number of the world’s biggest mining centers.
The Chinese southwestern province of Sichuan has an abundance of hydroelectric power, which is fed by Asia’s largest river, Yangtze. The advent of ASIC mining saw the province become home to some of the biggest mining operations in the world over the past few years due to its favorable electricity rates. But that is now coming to an abrupt end, driven by the country’s hardening stance on cryptocurrency mining and the ecosystem in general.
Local media has reported that 26 major Bitcoin mining hubs were forced to shutter in Sichuan, which has had a dramatic effect on the global hash rate. The Bitcoin hash rate peaked mid-May at 171 terahashes per second (TH/s) but has dropped to a low of 83 TH/s on June 23 — marking a 50% drop in just over a month.
Industry analysts estimate that more than 70% of the total mining capacity in China has gone offline over the past week, and that could increase to more than 90% in the coming weeks.
Kevin Zhang, vice president of Foundry Services — a mining infrastructure company — provided an overview of the situation in China in a Twitter thread. The key takeaways were that operators were given minimal time to pack up shop, while much of their electrical infrastructure is not compatible with systems in other countries.
Bitmain, one of the world’s largest manufacturers of ASIC mining hardware, has temporarily postponed sales of new mining equipment in an effort to support miners who are looking to sell second-hand hardware.
The Initial Impact
At a glance, the situation looks troubling, but some believe that the resilience of the Bitcoin mining ecosystem will prevail. The regulatory clampdown in China presents a unique opportunity for miners in other countries to accumulate BTC holdings.
Daniel Frumkin, mining researcher at Braiins and Slush Pool, unpacked the initial impact of this latest drop in hash rate in his correspondence with Cointelegraph:
“Difficulty has gone down in three of the past four adjustments, and the next adjustment may be the largest downward adjustment in Bitcoin’s history. For miners outside of China who focus on maximizing their BTC accumulation, this is an incredible opportunity as the hash value (BTC/TH/day) is increasing rapidly during a time when everybody would have been expecting the opposite.”
The researcher also highlighted the fact that the security of the Bitcoin network has not been affected despite the scale of the hashing power that was taken offline in recent weeks, adding: “Chinese miners are relocating machines all over the world, so the geographic distribution of hash rate will likely be far better in 6–12 months than at any prior time period in the ASIC era.”
Nevertheless, the effects of the Chinese mining squeeze was felt across the cryptocurrency markets as Annabelle Huang, head of GlobalX at Amber Group, highlighted a recent sell-off and slump in various cryptocurrency prices:
“Following Inner Mongolia and Xinjiang, Sichuan province officially shut down BTC mining earlier this week despite hydro being a greener option than coal-based mining.
Coupled with Fed’s hawkish sentiments, we saw a significant sell-off in the crypto markets. The shutdown in Sichuan came as a bit of a surprise and likely will cause medium-term selling pressure from miners who levered up to scale their operation during the bull run earlier this year.”
Rack Space At A Premium
There have been some interesting knock-on effects as Chinese-based miners go offline. First and foremost, these miners are now looking for new locales to reestablish their operations, while some have taken to selling their equipment.
Frumkin noted that the market for ASIC hardware would become saturated with a large amount of used hardware for sale, while third-party hosting service providers may very well find their excess space quickly filled up by miners looking to take ASICs online:
“Existing mining facilities that offer hosting to third parties are filling up fast, and new mining infrastructure takes a lot of time to plan and build.” He added further, “Any companies and countries who are able to quickly build infrastructure to host thousands of ASICs can be the biggest winners from this situation.”
The advent of ASIC mining heavily disrupted the efficacy of small-scale, enthusiast Bitcoin miners that simply could not compete with the scale of economies of industrial-sized mining operations.
For the first time in many years, smaller mining operators may have a chance to expand their operations, but some barriers still remaining as Frumkin explained further:
“Many smaller-scale miners use third-party hosting services that offer better electricity rates than typically found on regular energy grids. Since this hosting capacity is in high demand, it’s likely not very easy for those miners to scale right now.
However, any miners with off-grid facilities (e.g. next to gas wells) or who otherwise have direct access to some source of surplus energy are in a better position to start mining or to scale up than at any time in the past year or so because hardware is cheaper and more accessible, and the hash value (BTC/TH/day) is unexpectedly high.”
The Great Migration?
The reality of this latest regulatory move in China is that the landscape and distribution of the Bitcoin mining ecosystem are changing dramatically and rapidly. Some Chinese firms have been proactively looking for new locations to set up mining centers over the past two years as rumblings of a wider crackdown bubbled under the surface.
The likes of Canaan, which branched out from hardware manufacturing to actual mining, have established a base of operation in Kazakhstan, making use of its own proprietary Avalon mining units. BTC.com, the world’s fifth-largest mining pool, has also relocated its first batch of miners to the country as well.
A move to neighboring Asian countries will no doubt be the easiest exportation option for Chinese miners, but space and power will come at a premium, and options further afield are being explored already.
As Foundry’s Chang summed up on Twitter, the so-called “great ASIC exodus” certainly won’t be as seamless, as firms grapple with logistical considerations, hosting terms and negotiations. Frumkin believes this has tipped the scales in favor of hosting companies: “This is a huge opportunity for mining infrastructure companies to capitalize on increasing demand for hosting capacity.”
Indeed, it may be that the death knell has tolled for mining in China, and the great migration of mining equipment has begun.
Frumkin believes that all these factors point to North America becoming the next hub of Bitcoin mining in the years to come.
He claims that the close proximity to hardware suppliers have Chinese miners at an advantage, adding, “Meanwhile, many larger miners in North America have found sub-four and even sub-three cents per kWh electricity, which is on par or better than the prices Chinese miners have been paying in recent years.” He concluded:
“Now that they’re no longer facing a competitive disadvantage in hardware procurement, the stage is set for these North American mining companies to become dominant players in the next few years.”
As Darin Feinstein, founder of Core Scientific, aptly summed up on Twitter, the resilience of the Bitcoin mining network was evident in the fact that, despite a huge portion of the network’s hash rate being forced offline, firms quickly looked to relocate in an uncoordinated fashion while the end-user was largely unaffected.
As he stated: “China forced a shutdown of 60%+ of the Bitcoin network infrastructure. There were no lawsuits, no bankruptcies, no bailouts, no downtime. Network infrastructure just shrugged and relocated to countries with increased freedoms.”