Bitcoin price plummets as miner hash rate rises to all-time highs
Bitcoin miners can’t stop, won’t stop. The Bitcoin (BTC) hash rate continues to rise to new records, despite a sharp price decline.
Bitcoin mining hash rate peaked at 258 exahashes per second (EH/s) on October 4, according to Brains Insights, a mining data tool and metrics company. Although the Bitcoin price is down 58% year-to-date against the US dollar, the mining hash rate is up 43%.
Bitcoin Gandalf from the marketing team at Braiins told Cointelegraph that “the hash rate hitting another all-time high shows that miners are positive about the future prospects of Bitcoin.” Nevertheless, the current macroeconomic environment could pose a problem, as “the present is not so rosy for Bitcoin miners,” Gandalf said, adding:
“Bitcoin continues to trade in this tight band between $19,000-$20,000 and this recent increase in the hash rate will result in a sharp upward adjustment in mining difficulty, meaning miners’ margins will be further squeezed.”
In a series of tweets, mining engineers and hobbyists shared their thoughts on the hash rate hitting all-time highs while the price remains low. Rob W of Bitcoin mining company Upstream Data summed up the sentiment:
I am very proud of all my mining friends, things are going well. pic.twitter.com/dIzh2ITTfq
— Rob W. (@BikesandBitcoin) 3 October 2022
Market Analyst Zack Voell explained that the increasing hash rate may be a result of “XPs coming online.” The S19 XP Antminer is the latest model from Bitmain, one of the world’s most popular Bitcoin mining hardware providers.
The number of hashes produced in one second is often referred to as the hash rate. In Bitcoin speak, hash rate is a critical security metric, as well as one that many BTC miners keep an eye on.
Simply put, the more hashing – or computing power – the network gets out, the greater the overall security of Bitcoin. As a result, Bitcoin is more resistant to attacks, the most common being known as a 51% attack.
Currently, more and more miners are coming online to try to solve valid blocks to receive the Bitcoin block reward, which is currently 6.25 BTC, about $120,000. Blocks are solved and added to the Bitcoin blockchain on average every 10 minutes.
Related: Nuclear and Gas Fastest Growing Energy Sources for Bitcoin Mining: Data
The difficulty adjustment determines how quickly blocks are solved. It fluctuates roughly every two weeks and is expected to increase on October 10 based on the increasing hash rate. The difficulty adjustment has been on a steady march upwards in 2022 – meaning blocks are getting harder to solve on average – after dropping for the first time in March 2022.
In sum, despite the Bitcoin price continuing to wallow below $20,000, more and more miners are finding value in supporting the network. James Check, an analyst at Glassnode, explained in a chirping“With the hashrate pushing to new all-time highs again, despite all the promises to the contrary, it looks like #Bitcoin is still not dead.”
