Despite the Price Crash: Bitcoin Hash Rate and Mining Difficulty at ATH
While bitcoin’s price went through another steep correction in the past 24 hours, the network’s robustness only increases. The BTC hash rate recently tapped a new all-time high, while the mining difficulty went through a 9% positive adjustment, leading to a peak of its own.
Hash Rate and Mining Difficulty See ATHs
Ever since the summer of 2021, when the Chinese authorities ousted bitcoin miners and the hash rate dumped by 60% in weeks, the metric has been gradually recovering the lost ground. This led to nearing and eventually exceeding the previous peak, as CryptoPotato reported earlier in January this year.
The hash rate, the crucial metric showcasing the robustness of BTC’s network, continues to frequently register new ATHs, with the latest being at over 210 Ehash/s, according to BitInfoCharts.
The increasing hash rate means that there’re more miners putting their computational devices to work on the world’s largest blockchain. While this sounds good on paper, it would have actually been able to harm miners’ profits as it would have eventually made it extremely hard for them to earn rewards.
However, Satoshi Nakamoto predicted a similar possible scenario when setting up the network and incorporated a feature called mining difficulty adjustment. Essentially, it makes it harder (or easier) for miners to do their job depending on how many of them are currently online. It readjusts every 2,016 blocks (roughly two weeks).
Positive adjustments mean that the number of miners has increased, and vice-versa. For example, after the Chinese ban, the network experienced severe delays as there were fewer miners, and it had to negatively readjust itself several consecutive times.
Now, though, the landscape is entirely different. In the past 14 readjustments, there was only one negative (-1.5%) on November 28th. The last positive one, which occurred hours ago, increased the difficulty by 9.32%, which actually led to a new all-time high for this metric.
But BTC’s Price Goes Down
While all the essential network features are going for records, the cryptocurrency’s price is heading in the opposite direction. The asset dumped by $5,000 in hours to a six-month low at just over $38,000 hours ago.
Moreover, bitcoin’s price is down by more than 40% since its own peak at $69,000 registered in November. As such, BTC is no longer a trillion-dollar asset since its market capitalization struggles beneath $750 billion.
