Bitcoin Hash Rate Hits New All-Time High of 223.15m TH/s
A new all-time high has been reached at 223.15m TH/s. This is a strong indicator that the demand is still growing.
The Bitcoin (BTC) network's hash rate rose by almost 14% after it bottomed in April and recorded a new all-time high of 223.14 million TH/s. Bitcoin hash rate recorded the previous all-time high reading in mid-February, but due to negative factors such as higher energy costs, we have seen a pause in mining speed. Two months later, BTC's hash rate bushed off all the stumbling blocks, and it has resumed its long-term upward trajectory. Blockchain.com also revealed that Bitcoin's mining difficulty has also reached a record high of 29.79 trillion.
Bitcoin Hash Rate and Bitcoin Price
When it comes to Bitcoin, the hash rate is the measurement unit of the processing power of the Bitcoin network.
The higher the hash rate is, the more miners can generate Proof-of-Work (PoW), which leads to more blocks being added to the blockchain and hence, a higher chance of completing transactions. A higher hash rate also means that you as a miner have a better chance of finding a block than any other node, which results in block rewards.
The relationship between Bitcoin’s price and the hash rate usually goes like this: Mining activity increases when BTC prices are high, mining activity increases, and vice versa. This happens because when BTC prices are high, miners can earn more revenue per day, giving them an incentive to increase their operations. On the other hand, when BTC prices drop too low, some miners may be forced to shut down their operations due to a lack of profitability. So the two metrics have indeed moved in tandem in the past few years.
Bitcoin’s hash rate grew by more than 5,000% in 2019, when the cryptocurrency price almost tripled. The hash rate then jumped from around 40 million TH/s at the end of last year to above 160 million TH/s as of Feb. 21. During the same period, Bitcoin surged from $7,200 to as high as $68,789.63.
There's a strong correlation between the Hash rate and Price because they follow Moore's law. This law states that "the speed or capacity of computer chips will double every two years while costs will halve over time." In short, the computational power available for mining increases exponentially while the exact time cost of acquiring this hashing power decreases exponentially.
With the hash rate reaching a new all-time high, the demand for Bitcoin mining is still growing, even after a year of insane price gains for the cryptocurrency. The last time the hash rate reached a new all-time high, Bitcoin was worth around $40,500. At the time of writing, one Bitcoin is worth more or less the same as BTC is trading back and forth near $40,000.
Since the hash rate is a leading indicator, we can expect Bitcoin's price to try to factor in the new developments. While they don't have a positive correlation all the time, the hash rate is a crucial parameter that measures the Bitcoin network's strength.
Bitcoin Hash rate future
The future of Bitcoin's hash rate is exciting because it points to a more secure and decentralized network. As more people join the mining community, the total hash rate will increase. This means that the network's overall security will improve since it would be harder for any one person or group to control 51% of the hashing power. Additionally, a higher hash rate could lead to faster transaction times and lower fees as miners compete for a smaller pool of rewards.