Bitcoin hash rate rises as Ethereum miners switch to mining BTC post-merge
Amid the ongoing uncertainty in the cryptocurrency industry, an interesting trend emerged after Ethereum (ETH) ended its Proof-of-Work (PoW) mining algorithm and switched to Proof-of-Stake (PoS) validation with the Merge update.
As it happens, Ethereum ending PoW support has led some of its miners to switch their ETH miners to ones that can mine Bitcoin (BTC), increasing the BTC hash rate as a result, according to the new “State of the Network” newsletter from the blockchain analytics platform CoinMetrics, sent out on December 13.
According to the report, Bitcoin’s hash rate continued to grow through most of the fourth quarter of 2022, likely pushed by operators repurposing their previously Ethereum-focused GPU industrial rack space for Bitcoin mining-enabled ASICs.
As the report specifies, the increase in BTC hash rate, which represents the computational effort to validate transactions and secure the network, fell with the launch of the Merge update:
“It is difficult to put an exact number on the scale of this resource reallocation, but the Bitcoin hash rate quickly grew from 220 EH/s to 250 EH/s shortly after the completion of The Merge in September.”
Miners pushed by crash
That said, the ongoing aftershocks from the collapse of FTX, once one of the largest crypto exchanges in the world, have put downward pressure on the price of spot BTC, as well as the hash rate in the process, demonstrating another bout of challenges for the miners.
With it, the flagship digital asset saw its mining difficulty, the built-in parameter that automatically adjusts every two weeks to keep block times under control, reduced by over 7%, the biggest drop since miners were forced out of China this spring. of 2021.
Bitcoin price analysis
Meanwhile, the price of the first cryptocurrency at press time is at $17,686.33, representing a decrease of 0.76% on the day, but still up 5.10% for the week, and 5.32% over the last 30 days.
With a market capitalization of $340.19 billion, Bitcoin retains its position as the largest digital asset by this indicator, followed by Ethereum in second place and a market capitalization of $157.53 billion, according to CoinMarketCap data retrieved 15 December.
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