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- 1 Bitcoin hashrate is seeing an uptick right now.
- 2 It’s particularly significant because BTC is facing a downward movement.
- 3 The market is feeling positive about it as it may have an impact on the asset’s price as well.
Hashrate is the computational power of a blockchain network. It is applicable to the Proof-of-Work consensus mechanism. The high or low rate indicates the level of security, mining difficulty, and overall performance of the network. When it goes high, it means that the activity of creating cryptos is profitable. It is because news miners are joining and old ones are expanding their reach.
Everything About Bitcoin Hashrate Going Up
The Bitcoin hashrate is going high right now and everyone is pleased about it. The rates going up means that mining is lucrative right now. On the other hand, when it declines, the market interprets just the opposite thing.
It indicates that some miners are getting disassociated from the network. Mining isn’t that profitable anymore on the blockchain currently.
Recent reports show that the 7-day average Bitcoin mining hashrate has impressively increased. Right now, it is achieving an all-time high and is consistently progressing. The upping of the hash rate is always a positive sign for cryptocurrency. It signifies that the security of the mechanism is strengthening as well. The security angle becomes clear because more than 50% of hacks become harder to solve.
However, that happens only when new hashrates are added to the network. These new additions also have to be sufficiently decentralized. This is because the newly-added entities managing the rigs may not be able to fulfill the security requirements. Furthermore, the timing of this hashrate increase is quite interesting. Notably, Bitcoin is going through a bearish phase right now.
Usually, this impacts the block rewards that miners get for solving blocks. Hence, the hashrate is supposed to be in sync with the spot price. Despite that, it is going up; beating the norms.
Also, there’s a feature of the Bitcoin blockchain that the rate at which blocks are solved remains constant. Nevertheless, this changes when the chain validators raise their available mining power.
Upon receiving the extra power, the mining activity gets faster. To obtain the previous speed, the network adjusts the mining difficulty. This makes the mining activity harder. Due to this limitation, the mining hashrate also heightens the sense of competition among the miners. As the value increases, the share of rewards is reduced.
What Does it Mean For the Crypto Space?
As mentioned above, the increase in hashrate is happening against Bitcoin’s price downward movement. The rise in the hashrate is certainly a good indication. However, it’s true that the impact will be seen when Bitcoin’s price goes up. Crypto users are hoping that it will also affect the growth and adoption of blockchain. In addition, it would elevate the profitability factors of mining as well.
Everyone’s hoping that the current trend in mining will continue for some time. They are also expecting it to bolster the other cryptocurrencies and their prices. Nonetheless, no one knows for sure if some other facts will bring it down. So, the crypto users will have to sit this one out.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
