Bitcoin’s mining power, measured by its hashrate, is skyrocketing! The 7-day average hashrate recently hit a whopping 942 EH/s, incredibly close to the all-time high.
What is Hashrate?
The hashrate shows the total computing power used by Bitcoin miners. Miners compete to solve complex math problems to add new blocks to the blockchain (this is called “proof-of-work”). A higher hashrate means more miners are participating or existing miners are boosting their power. A drop suggests miners are pulling out, likely because mining isn’t profitable enough.
Recent Hashrate Trends
Just a month ago (June 28th), the hashrate plunged to around 796.2 EH/s. This dip might be because Bitcoin’s price stalled. Miners earn Bitcoin as a reward for adding blocks, so their income is directly tied to Bitcoin’s price. When the price goes up, mining becomes more lucrative, and miners add more power. When the price drops, some miners pull out.
However, the hashrate has since recovered strongly. Even though Bitcoin’s price has leveled off recently, the hashrate is pushing towards a new record, currently at 942 EH/s (just shy of the record 943.6 EH/s from mid-June).
Bitcoin Difficulty Also at an All-Time High
Interestingly, this hashrate increase happened despite another challenge for miners: Bitcoin’s “difficulty” also hit a new high (127.62 TH/s). Difficulty adjusts to keep the time between new blocks at around 10 minutes. So, even with more mining power, miners still earn roughly the same amount of Bitcoin. Why then do they add more power? Because they need to compete and stay ahead to keep earning that reward. Those who don’t keep up will earn less.
The Bottom Line
The hashrate has generally increased throughout Bitcoin’s history, and this trend is likely to continue. Miners constantly need to upgrade to stay competitive.
Current Bitcoin Price
At the time of writing, Bitcoin is trading around $118,900, a 1% increase over the last week.