Sunday, May 28

Bitcoin hashrate hits all-time high

Bitcoin price has faced various corrections that have pushed it to $34,000, 50% below its all-time high. However, despite this, the mining difficulty and hashrate of Bitcoin reach a new all-time high.

What happens to Bitcoin mining?

We must remember that the Bitcoin hashrate, which is equal to the global computing power of the cryptocurrency, saw a major correction after China banned mining in the country. And, as we have previously noted in CT, China was once the largest Bitcoin mining hub in the world.

Since then, the miners of the leading crypto have moved and began to increase such activity in countries such as the United States and Kazakhstan. However, the difficulties for Bitcoin miners continued after this second country shut down the Internet.

In this sense, during the last few months the Bitcoin hashrate has experienced high volatility and frequently records new all-time highs, or better known as ATH. In fact, the last one was over 210 Ehash/s, according to BitInfoCharts.

Bitcoin (BTC) hashrate hits new all-time high. Source: BitInfoCharts.

But why is this important?

To understand the significance of this all-time high, it is essential to understand what Hashrate is. It is the measure of the computational power used to verify a transaction and add a new block in a Blockchain based on Proof of Work consensus, as is the case with Bitcoin.

Therefore, the recovery and rise of the Bitcoin hashrate means that there are more miners to put their machines to work on the leading crypto blockchain. But what happens when so many miners work on the network? Well, mining difficulty adjustments occur.

Thus, with the rise in hashrate, the Bitcoin mining difficulty recently increased by 9.32%, being an all-time high.

In theory, the relationship between the hashrate and the price of Bitcoin is directly proportional, since, as more people buy and sell BTC, there must be more liquidity, and it is precisely the job of the miners to provide this liquidity. Usually, people tend to buy and sell BTC when it rises in value.

However, this has not been the scenario. While hashrate and mining difficulty reach ATH, Bitcoin price has dropped to $34,000.