Positive Signal For The Crypto Market?
Bitcoin’s hash rate is constantly growing and breaking new records. While Miner’s profit has fluctuated over the years and has fallen sharply this year in particular due to the sharp drop in share prices, the increase in the hash rate is a constant in the bitcoin network and a positive signal.
Bitcoins (BTC) Hashrate now rose above 52 trillion per second for the first time on August 4, as the data from Blockchain confirm. Since the beginning of the year, the hash rate has tripled.
In the last three months alone, an increase of 60 percent was recorded. Most recently, in mid-June, we reported a new record with a value of just over 40 trillion.
Why and to what extent the increase by new people or companies who have entered the miner business or by new, more efficient mining rigs of the big miners, can only be speculated about, since no statistics are collected about it.
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What Does The Increasing Hash Rate Mean For Bitcoin?
The rising hash rate clearly shows that at least the mining industry continues to boom and has positive expectations of the bitcoin price.
The hash rate describes the computing power of the Bitcoin network to solve the mathematical operations necessary for security reasons before a block is written into the block chain. The hash rate reflects the number of attempts a unit can make when it solves the operation.
As mining is known to be very cost-intensive and has a high consumption of electricity, miners must always keep an eye on profitability. Mining can become uneconomical from a certain BTC price.
Besides the price, the hashrate and degree of difficulty are the most important factors. As the hashrate increases, the level of difficulty increases and this in turn would result in the miners earning a smaller amount of BTC and a portion of the transaction fees.
For some miners, however, this also means that those who do not upgrade their equipment or find cheaper electricity will have to contend with a sharp decline in profitability.
The increased competition within the Bitcoin network also leads to a better security of the entire network.
That the hash rate continues to rise despite the decline in the Bitcoin price also shows, according to many experts, that at least the miners are still bullish and expect a price increase in the near future.
A former Wall Street dealer and journalist wrote in June:
The price follows the hashrate
Despite last week’s correction, confidence in Bitcoin’s long-term future remains strong. ICE’s announcement to establish and launch a regulated platform for digital assets by November strengthens the conviction of many that Bitcoin has bottomed out.
Bitcoin’s share price moves sideways, falling slightly by 0.20 percent to EUR 6099.21 within the last 24 hours at the time of writing (9:30 a.m.). Bitcoin’s dominance is 47.66 percent and its market capitalization is just under 104.874 billion euros.