Bitcoin’s Blockchain Hash Rate Power Grew 550% in the Last Year as Upward Trend Looks Promising
Bitcoin has been in a bear trend during the whole year. Additionally, it has lost over 65% of its value since its all-time high in December 2017. However, the network’s hash rate has been growing during the last year and was able to reach new highs some months ago.
According to data provided by Blockchain.com, Bitcoin’s hash rate is currently 40,347,952 TH/s. This represents an increase from a year ago of 266%. In October 2017, Bitcoin hash rate was over 11,000,000 TH/s.
If we compare October 2017 with the network's all-time high registered in August, the increase is close to 462%. On August 27, the network reached 61,866,256 TH/s. Since that moment, the network lost 34% of its hash power.
It is important to mention that the hash rate is the speed at which computers solve the problems needed to process transactions on the Bitcoin network. Miners use very powerful computers that keep the network secure and approve transactions. Mining activities are usually very expensive since the hardware required to perform these tasks is expensive and consume large amounts of energy.
There are some individuals and cryptocurrency experts that suggested that hash rate is related to future price gains. Some of them say that price follows hash rate because the network is more secure and capable. But this year, the market has been operating negatively since January 2018.
Other experts such as the chief operating officer at Blockbid, David Sapper, say that the growing hash rate shows that users are impressed with Bitcoin’s market.
However, Bitcoin supporters are waiting for an ETF approval that would trigger a new bull market in the near future. This could happen at the beginning of 2019, but there is nothing confirmed on the mater. Additionally, institutional investors could also enter the market in the near future. There are several companies that are developing different institutional-grade platforms.
Nevertheless, there are some issues that are currently affecting the hash rate. Bitcoin mining difficulty has also increased as there are more miners competing to solve the same amount of blocks. A higher difficulty is also related to more electricity consumption for cooling systems to keep the hardware operating at optimal temperatures.
The market at current prices might not help to sustain these activities, and that’s why there has been a reduction of 34% in the hash power in the last two months. Miners that receive Bitcoin as a reward for their job are selling their coins and are not able to cover their operative costs and many smaller and inefficient miners are leaving the market.