Bitcoin hashrate, also known as hash power, is an integral component of the Bitcoin network – it is used in cryptocurrencies and it helps measure how much power the bitcoin network is consuming to be continuously functional. A growing hashrate signifies that bitcoin is being used by more people as well.
Although there has been some downward pressure on bitcoin prices, the hashrate has been souring. According to several resources, the hashrate has doubled since the 2017 peak – which essentially means that it has increased by 100 percent in the past four months.
To put the growth of hashrate into perspective, the power had come online at ETH end of 2017 and the amount of it was equivalent to 2 million top of the range SHA-256 ASIC units. These units represent around $4 billion worth of additional mining equipment to secure the bitcoin network. Further. There is also additional hashpower from various ASIC setups such as BlackBox shipping container units by Bitfury.
This year, Valery Vavilov, the CEO of Bitfury, estimated that his company as 10 to 12 percent of the mining market, which is of course a significant figure. For those who may seem surprised about the growth of hashrate, there were actually signs of growth far earlier than now. Over the last four and a half years, hashrate has tripled and it has done so in conjunction with efficiency gains in the mining technology market and hardware. In addition to the growth in hashrate, the production costs as an element of the mining market has increased as well.
Bitmex released a research paper exploring China’s influence on Bitcoin mining, finding that there has been over-capacity of energy production concerning aluminum. The excess in hydro power arises from smaller plants, which are having trouble keeping up with the demand. There are certainly concerns about over power-consumption. According to another paper released by Coinshare that delved into the issue, “
The cheapest electricity in the world is in many cases stranded hydro power and Bitcoin miners [who] have shown a strong will and ability to seek out the cheapest possible sources, wherever they may be. While much of the industry has been confined to China in the last few years, we are now observing a large number of mines constructed across a much wider geographical spread.”
At this point, it is also important to keep in mind that although hashrate has been growing, it is still just about impossible to calculate hashrate accurately. However, there are estimates and they are being calculated by using elements such as expected blocktimes, block difficulty, and the time it takes for a block to be mind.