- The hashrates of BTC and ETH are climbing again after weeks of stagnation.
- Ethereum’s hashrate has risen 11% from its lowest point, while steadily approaching 100E.
- The decreased hash rate was the result of miners shutting down operations following strict Chinese regulations. anti-crypto regulations.
- Lower hash rates extend lock times, while higher hash rates mean better odds of getting the correct hash.
The hashrates for Bitcoin and networks are on the rise once again after weeks of decline. Hashrates fell more than 40% in a month due to the crackdown on cryptocurrencies in China. The reduction in hashrates also coincided with the sharp drop in the price of bitcoin, as the asset fell from its high of $ 60K to levels below $ 30K.
Like the ray of light in all the dark clouds, the hashrates are rising again as the miners move their outfits to more welcoming regions. Investors rub their hands in great delight as the uptrend is a strong indicator of optimism for both Bitcoin and Ethereum.
Increase in hashrates
After weeks of decline, the Bitcoin and Ethereum hashrates are finally gaining significant steam to break free from their previous levels. Based on available data, Ethereum’s hashrate is up 11%, while Bitcoin’s is approaching 100E.
The catalyst for the networks has been the reopening of several Chinese crypto mining farms.
China’s crackdown on cryptocurrencies led to a massive exodus of mining farms to regions that are more accommodating. By all indications, it appears that several mining farms have reopened their operations.
The improved hashrates have already had an impact on asset prices. Bitcoin and Ethereum have made gains of more than 2% in 24 hours, while trading volumes have also increased significantly.
The importance of increasing hashrates
Hashrate is the computational power used to extract and verify transactions on a blockchain using the proof-of-work consensus model.
To add data to the blockchain, miners must use the computational power of their devices to guess a number that grows in complexity. The process consumes energy, but it is an integral part of the process.
Higher hash rates indicate a strong network, as it becomes difficult for rogue agents to carry out a 51% attack that would disrupt the network. There is also a strong correlation between increasing hashrates and increasing the value of an asset.
When prices are high, miners are incentivized to add more computing power. There is a school of thought that says that the price follows the hash. Conversely, low hashrates can cause prices to drop.
On the other side
- Following the anti-cryptocurrency campaign carried out by the Chinese government, Chinese miners are departure the country en masse.
- This exodus will cause a shift in the balance and cause another country to become the world leader in hashrates.
The fall of Bitcoin and Ethereum hashrates
Hashrates for Bitcoin fell more than 40%, while those for Ethereum fell 20% in less than a month, bringing it to its six-month low. At the peak of its hash rate, Bitcoin was counting on 168,000 per second figures, but the drop put it to the ground with lows of around 86,000 PH / s.
The reason for the decline was closely related to the Chinese regulatory authorities’ decision to crack down on mining activities.
This, in turn, led Chinese miners to shut down their operations, with some seeking to bring their businesses to more pleasant climates. China accounted for more than 65% of the world’s hashrates for Bitcoin and an attack on mining operations in China would surely have knock-on effects around the world.
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