Theories abound as Bitcoin hash rate records unprecedented increase
Hodlonaut – aka Magnus Granath – asked the Bitcoin community where the flood of extra hash rate came from expressing concern over the recent spike.
Garnet said he found the pace at which the hash rate is climbing “A little scary.”
Bitcoin hash rate records a new all-time high
Hash rate refers to a measure of the network’s processing power. An increasing hash rate indicates that the number of miners is increasing and/or the hash output/efficiency of mining equipment is increasing.
There is an ongoing debate about how hash rate and price are correlated. Some say the hash rate moves first – leading to price changes. Others argue that price changes drive movement in the hash rate.
However, an increasing hash rate is generally considered a positive development from a security perspective. This is because it becomes more expensive to perform a 51% attack on the Bitcoin network. Furthermore, it also signals the confidence of the miners.
Data from ycharts.com shows that the Bitcoin hash rate reached 335 TH/s on March 26. Zooming in shows an all-time high of 398 TH/s was reached on March 23.
At its highest, the gain so far this year was 43%. Additionally, since the Terra ecosystem implosion, in May 2022, the Bitcoin hash rate has risen by 110%.
Community floats different theories
Seb Gouspillou – CEO of mining company BigBlock DC Bitcoin – explained the phenomenon of miners upgrading outdated machines to newer, more efficient equipment. He also said: “there are new farms everywhere too!“
“It’s nothing special. Old farms replacing their old asics with new ones. The energy improvement (from S9 to S19) is a factor of 3.3.“
Magnus commented that this seems like a valid explanation. But asked if this alone is sufficient to explain “outstanding” “rest in peace.”
In response, Gouspillou said his firm upgraded from 2.5 EH/s machines to 17 EH/s rated in 2018. And while the “scratch” is impressive, he believes it’s consistent with expectations surrounding firms upgrading their equipment.
Another user attributed the problem to the influence of Ordinals and more miners joining the network to earn fees on the mania.
Research analyst at River Financial Sam Wouters said that recent Bitcoin price increases had encouraged miners to turn machines that were previously sidelined back on.
Several others theorized that unknown nation-states are getting into Bitcoin mining.
