Bitcoin is celebrating its 13th birthday today as the network underwent a six-month-long rally to attain a new all-time high hash rate.
Happy birthday, Bitcoin! Thirteen years ago today (January 3, 2009), a person or group of people under the pseudonym Satoshi Nakamoto launched the Genesis block into existence, earning 50 BTC.
The launch of the network was preceded by the publication of the Bitcoin whitepaper (October 31, 2008). The first transaction took place on January 12, 2009: Satoshi Nakamoto sent 10 BTC to Hal Finney. Three days before that, version 0.1 of the Bitcoin software was released. Nakamoto's identity and the motives behind the creation of bitcoin remain a mystery that they are trying to unravel in the cryptocurrency community.
Fast-forward to 2022, the Bitcoin network shows no signs of slowing down by reaching a new all-time high hash rate.
Bitcoin celebrates 13th birthday with new hash rate ATH
The computing power in the Bitcoin network has increased by a staggering amount due to the geographic relocation of miners and new mining equipment.
The new year has sparked a Bitcoin hash rate explosion. According to data from Glassnode, the global hash rate is now 207.53 exahashes per second (EH/s). According to Blockchain.com, the previous all-time high of 198.5 million terahashes per second was reached on April 15, 2021.
This shows that Bitcoin has escaped the fall in hash rate corresponding to the multi-stage Chinese repression against cryptocurrency in 2021. According to Bitfury, most of the recovery is because "new generation equipment are online" no to the relocation of equipment from China, which would have been too inefficient to operate in other countries.
Bitcoin hash rate was hit by Chinese repression
In April 2021, Beijing officials began analyzing the energy use of local miners, sending notices to data centers to gather more information on cryptocurrency mining. In May 2021, China banned banks from offering Bitcoin services and began a systematic crackdown on mining activities.
This caused the hash rate to drop steadily, hitting a record low on July 21, 2021, of 58.4 million terahashes/s. This corresponded with a drop in price to $29.79K. Prior to this, on April 15, 2021, a price spike of $62K corresponded with a global hash rate spike.
However, Jason Zaluski of Toronto-based Hut 8 Mining Corp said: "China banned mining simply caused a geographic shift ... we see this [move] to other countries, including Canada and the United States, as a net positive result." .
He was correct, as American companies became beneficiaries of displaced Chinese miners seeking a haven for mining. Other countries have also seen new miners due to their low electricity costs.
Why is the importance of hash rate?
The hash rate refers to the amount of computing power that is supplied to the Bitcoin network. Whenever a transaction is verified, it is recorded on the blockchain as part of a block. Applying a hashing ensures that transactions are valid.
To receive BTC, a miner must successfully " hash " the header of a block, which contains a redacted version of the contained transaction data. The possibilities of finding the hash become more complex as more coins are mined; therefore, a higher hash rate (more computing power) improves the probability that a miner will receive a Bitcoin reward.
Hashrate calculations are not accurate, and as a result, it is better to focus on longer periods of time, such as weeks or months, when evaluating hash rates. The indicator plays an important role in determining the security of the network. The more miners on the network intend to mine BTC, the more secure the network becomes.
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