Bitcoin's network took an abrupt turn this month as a prior rally for bitcoin's hashrate took a swift dive down 40%.
Data from Blockchain.com shows bitcoin's hashrate flash crashing from a previous high of around 100 exahashes per second (EH/s), to a relatively lackluster 68 EH/s, in the space of 24 hours. Oscillating fluctuations of this nature are relatively common in bitcoin's hashrate - as depicted by the chart above. However, this crash marks one of the most significant pullbacks in hashing power in over two years.
The drop is even more astounding given that hashrate has been on a massive roll this year. In fact, according to the data, since December 2018, bitcoin's network has been on a solid run - despite the usual fluctuations - and even hit a milestone high of 100 EH/s just last week.
Why Did The Hashrate Flash Crash?
As for any explanation, there is no overtly apparent reason. One could surmise that this is an exodus of miners, leaving due to a lull in bitcoin's price. Miner profitability depends on several criteria; the equipment used; the cost of the miner's electricity bills; BTC price; and the mining difficulty. If any or all any of these factors stray from equilibrium, the miners may decide to shut up shop, resulting in a drop in hashrate. Indeed, this means if a big mining firm theoretically drops out, we could see a crash much like today.
The importance of hashrate cannot be undermined; it not only denotes the growing strength and security of the network but popularity too. Essentially, hashrate measures the amount of computational power within bitcoin, the higher the hashing power, the more miners are contributing to the network; the more miners there are, the more secure the network becomes. However, as hashrate increases, BTC becomes harder to mine, due to difficulty adjusting accordingly. Read More...