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Bitcoin’s hashrate had been rising exponentially from 2009 through mid-2018, increasing through the megahash (M/H), gigahash (G/H), terrahash (T/H), petahash (P/H), and exahash (E/H) ranges. The hashrate first exceeded 60 EH/s in August 2018, and then the exponential increase gave way to stabilization.
In September and October 2018, the hashrate remained stable, averaging above 50 EH/s, simultaneous with the price of Bitcoin being stable near $6,500. Then the price of Bitcoin plummeted starting in mid-November to as low as $3,100 in December. The hashrate of Bitcoin collapsed to 32 EH/s during this market crash, implicitly indicating 20-30 EH/s being forced offline due to a lack of profitability, which represents billions of dollars of equipment.
However, the collapse in hashrate may be coming to an end, at least for now, due to the price of Bitcoin rising back to the $4,000 level combined with a 29 percent decrease in mining difficulty.
As can be seen in the chart, Bitcoin’s hashrate appears to have stabilized in December, breaking the trend of constant decline.
There are two factors that are bringing about stabilization. First off, the price of Bitcoin has stopped decreasing and has risen back to where it was at the beginning of December near $4,000. A stable Bitcoin price is a necessary ingredient for a stable hashrate.
More importantly, the mining difficulty of Bitcoin has dropped from 7.184 trillion to 5.106 trillion, a 29 percent decline, which makes Bitcoin mining 29 percent more profitable per unit of hashrate. As long as price does not continue to fall Bitcoin will find an equilbrium hashrate since difficulty adjusts downwards as miners turn off their rigs. The point at which the difficulty stops adjusting downwards is the equilibrium point, a steady state where the existing hashrate can profitably mine or break even without the loss of further hashrate.
Currently ,Bitcoin’s hash rate is near 36 EH/s, which would yield a 2.6 percent increase in difficulty if the difficulty re-adjustment happened now. This suggests that the equilibrium level for Bitcoin’s hashrate, at least at the current Bitcoin price of $4,000, is right around the current hashrate.
That being said, the price of Bitcoin going up or down can rapidly change the situation. If Bitcoin retraces back towards $3,000, then the hashrate is likely to fall further, and if it rallies strongly then the rigs that were turned off would quickly be switched on again.
The fact that there are 20-30 EH/s of rigs shutoff makes the future a bit gloomy for Bitcoin miners, since increases in Bitcoin’s price will not lead to higher profits for miners until all of those rigs are switched back on.
There used to be a lag effect between Bitcoin’s price rise and the switching on of new rigs, which allowed miners to make bigger profits before difficulty adjusted upwards. Until the hashrate exceeds 60 EH/s, the time it takes to switch on the dormant rigs will be instant, whereas before miners had to wait weeks or months to order rigs and then switch them on. Based on the data, Bitcoin would probably have to be at $7,000 or higher before Bitcoin miners start seeing increased profit margins.
Looking at the broader picture though, it is certainly good news that the Bitcoin mining hashrate has stopped going down since this means Bitcoin will continue to be extremely secure and decentralized. A rapidly dwindling hashrate would make Bitcoin less secure and more centralized, two factors that would threaten Bitcoin’s reputation.
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Difficulty changes approximately every two weeks. Current value is updated every 2 hours from Bitcoin Block Explorer: more on difficulty Bitcoin Block Explorer: hash rate: Specify how many mega-hashes per second each worker (graphics card or cpu) is able to generate. hash rates examples: consumption: The power consumption in watts of each All these are called Hash rate and is computed as Hashes generated per second (H/s). Hash rate denominations are measured in standard metric prefixes just like how mass, volume, length and time are expressed. kH/s (Kilo hashes per second) = 1 000 Hashes/s. MH/s (Mega hashes per second) = 1 000 000 Hashes/s 1 mega hash per second is one million (1,000,000) hashes per second. 1 giga hash per second is one billion (1,000,000,000) hashes per second. 1 tera hash per second is one trillion A hash is a function that takes a string as an input, does a transformation of it, and returns a second string that's considerably shorter than the original and that could be considered is the "resume" of the original. You can check Wikipedia's Hash definition. Hashes are required for "mining". Hello, “Make it simple, make profit” It’s BitcoinGuide. Don’t forget to “Follow” me and press “Likes”. I will begin BTCUSD Bybit Bitcoin Chart Analysis for July 20th . At the top, it is a 30-minute chart created last week. In the blue finger section, the entry timing came out exactly, Within the red...
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