The total computer power that is directed to the Bitcoin network has reached an all-time high again. The measurement of this metric is known as the “hashrate” and it is a good way of measuring the security of the network. The network hit a new high of 85 exahashes (EH/s) last week and the mining difficulty about 12 trillion.
According to data from blockchain.com these metrics have increased by nearly 60% in recent months leading many to speculate that new ASIC mining machines have been switched on.
What is Mining Difficulty?
This is the measure of how difficult it is to solve the puzzle or riddle the miners compete on when producing a block of transactions. The difficulty level is adjusted every 2,016 blocks which ultimately equates to around 2 weeks. This guarantees that the time taken to produce a bitcoin block of transactions is kept at approximately 10 minutes on average. This means that when new hardware is directed to Bitcoin mining the difficulty will be adjusted in line with keeping the difficulty in line with 10 minutes for block times.
Bitcoin Hashrate vs Price
It is a never-ending debate as to whether hashrate leads price or if price leads hashrate for Bitcoin, many speculate that there is a close-knit relationship between the two that can be tracked. Famous Bitcoin proponent and co-host of The Keiser Report from RT, Max Keiser, is a strong believer in the Bitcoin Hash rate being a leading indicator of the Bitcoin Price:
“Price follows hashrate and hashrate chart continues its 9 yr bull market.”
If Keiser is right then it would follow that the Bitcoin price could see a big pump in value over the coming weeks and even months.
The Bitcoin halving event that is coded to take place around mid-2020 will see the block reward dropping from the current 12.5 BTC down to 6.75 BTC putting further pressure on the Bitcoin network miners to compete for fewer coins whilst computing much higher difficulty puzzles.
These factors are highly likely to cause competition for bitcoin rewards by miners to dramatically increase leading into the event as miners scramble to scoop up coins at the current 12.5 BTC per 10-minute rate.
Would you like to know more about Bitcoin and the block reward? Head on over to our Bitcoin101 sections where you can read up on how the Cryptonomics and game theory of Bitcoin work.
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