The Bitcoin hash rate recently hit new all-time highs (ATHs) over 117 Exa hashes per second (EH/s). Is this a bullish price indicator?
January 6, 2020, | AtoZ Markets – The Bitcoin network has just registered a new hash rate of 117 EH/s, an encouraging move that may be a precursor of where BTC price leans in the immediate term. Interestingly, the uptick is four months to a decisive Bitcoin halving. Bitcoin halving reduces daily BTC emission and therefore daily returns for miners.
The intrigues of Proof of Work algorithm
Well, what do you know… New Bitcoin hashrate ATH.— hodlonaut🌮⚡🔑 (@hodlonaut) January 6, 2020
Bitcoin miners know…
Halving 4 months away. pic.twitter.com/28NXd2Mevu
Bitcoin is the first network that uses the Proof of Work consensus algorithm.
Miners from across the globe can plug in and funnel their computers’ computing power, measured in hash rate, to process BTC transactions and to secure the network against third party attacks.
It’s an energy-intensive activity that is cut-throat competitive and worsened by the high demand for the latest up-to-date ASIC miners. Besides, more entities are seeking to tap into the lucrative trade and are rapidly setting up mining farms.
The rise of BTC mining power
The rise in the hash rate, a metric that shows how fast it would take a mining gear to calculate hash functions generated from Bitcoin’s SHA-256 encryption, highlights the confidence amongst miners.
From the way the Bitcoin network is coded, an influx of miners (as shown by hash rate increase) means the network’s mining difficulty will also rise in tandem.
Bitcoin starting 2020 with a BANG.— Charles Edwards (@caprioleio) January 2, 2020
Hash Rate hit a new all time high on 1/1/2020: 119M TH/s.
Finally broke above the last ATH set more than 2 months ago in October.
Bitcoin Network stronger than ever before 💪
Happy New Year! 🍾 pic.twitter.com/c0dfvewXfy
Only mining pools with the most hash rate, or farms using the latest mining gear, stand a chance of earning the 12.5 BTCs emitted from the network every 10 minutes and the transaction fees.
Bitcoin price impacts hash rate
Extended, the uptick in hash rate hints at a price increase in the medium term. Bitcoin is structured in a way that hash rate follows price. The higher the price, the more the miners and therefore the higher the uptick.
2020 is already promising to become a great year for bitcoin. With the imminent halving set to take place later in the year, the flagship crypto has already hit a new record with its network hash rate once more topping the previous all-time highs of 2019. pic.twitter.com/7iywKZFzUf— Gabriellyan (@GabriellXL99) January 2, 2020
Conversely, whenever prices tumble, hash rate follows suit—though it is not always the case as there are often asymmetrical delays in the trailing effects, and weak miners often switch their energy-consuming gear at the face of the mounting operation costs and low return on investment.
At the time of press, Bitcoin price is trading at $7,527. The bulls are back in contention as prices bottom-up from Dec 2019 lows.
What do you think about Bitcoin hash rate at ATH? Share your thoughts in the comments section below!