Bitcoin’s hash rate is trending at almost all-time highs, according to on-chain data as of January 20, 2023.
Bitcoin hash rate of 274 EH/s
According to flow According to BitInfoCharts, the Bitcoin network currently has a hash rate of 274 EH/s, up nearly one percent over the past 24 hours. Even at this rate, the hash rate has dropped from its January 16 peaks of 302 EH/s.
Hash rate is the measure of computing power dedicated to BTC mining. As a proof-of-work platform, the Bitcoin network relies on a community of node operators using Application Specific Integrated Circuit (ASIC) equipment for block assertion and security.
ASICs are special nodes explicitly designed to mine cryptocurrencies in proof-of-work networks, using the SHA-256 consensus algorithm, among others. ASICs that can mine BTC can also be used to mine its forks, according to a proof-of-work system, including Bitcoin Cash. For confirming a block, a miner is rewarded with BTC.
The amount of computing power channeled into the Bitcoin network often fluctuates depending on many factors, including the cost of scarce equipment, often from Bitmainand the price of BTC.
In recent years, chipset manufacturers, led by Bitmain, have been tuning their equipment, making them more efficient in power consumption. At the same time, they pack them with more force.
Accordingly, the latest BTC ASICs can provide more computing power. like a illustration, the Bitmain Antminer S19 XP released in July 2022 can produce 140 TH/s when using 3010W. Meanwhile, the older versions like Bitmain Antminer S17+ can generate 76.00 TH/s while consuming more power at 3040W.
Efficiency improvements coupled with rising prices may explain the rising hash rate. Since miners are likely to power their equipment as Bitcoin prices recover, the hash rate could bounce back even to new all-time highs in the coming months.
This will be especially true if BTC prices continue on their current trajectory. After months of lower lows in 2022, Bitcoin appeared to have bottomed out at $15,300 in November 2022. According to the TradingView charts, prices are now moving above $20,000.
Mining difficulty level adjusted upwards
Hash rate trends and difficulty values are proportional. In response to the rising hash rate, near an all-time high, the network automatically raised the mining difficulty by double digits to 10.26% on January 16. The difficulty was revised upwards by 13.55% on October 10, 2022.
Mining difficulties in Bitcoin change depending on the hash rate. With more computing power, miners can extract more coins within the allotted 10-minute block production time. Bitcoin ensures that this never happens by increasing the difficulty, making confirming a block more difficult and consuming more resources.
This way, the 10-minute block-producing time is maintained and the network continues to function as designed, regardless of miners’ investment.
In their observationBinance, which also operates a mining pool, said that if BTC prices rise above $23,000, miners using efficient miners willwould still make a profit despite the difficulty adjustment upwards.
Feature image by Alexander Ryumin/Tass via Getty Images, chart from TradingView.com