Bitcoin network health, often determined by the amount of computing power being used to secure the network, has been reaching new highs through most of 2019 as its hash rate continues to tear away.
Many are heralding this as a sign of the growing power and potential of Bitcoin, despite its market price lagging in the past few months. Other metrics, such as its dominance over the cryptocurrency market, as well as the upcoming reward halving, have also been cited as potential catalysts.
However, could it be that Bitcoin’s hashing rate, and by extension its mining difficulty which has not dropped by more than 1.18 percent this year, is only skyrocketing like this because of hardware?
A number of factors can influence the Bitcoin hash rate. It is essentially a metric of how much power is being used to mine new blocks, validate transactions, and generally secure the network. With that, it can be influenced by the interest in mining the blockchain – which in turn is affected by difficulty, profitability, and reward – but also external factors like the halvening.
There will be those who say that Bitcoin’ hash rate is only growing like this in anticipation of the reward halving, which will be seen early next year. Bitcoin’s mining reward will drop by 50 percent, so many miners could be making hay while the sun shines.
That could indeed be playing a part, but one has also to consider that as hash rate increases, so does the difficulty, and with the price of the cryptocurrency falling of late, profitability is down – by the hash rate still climbs?
One user on Twitter, Martin Audley, has suggested that Bitmain’s new ASIC hardware could be the root cause for the ever-increasing hash rate.
The latest release from Bitmain, the S17e, and the T17e, launched in early September, are aimed at higher efficiency, more stable operation, and more longevity. Both of these models offer higher hashing, as well as better energy efficiency, which would aid miners with the drop off in profitability because of market price, and increased running cost from greater mining difficulties.
It would be difficult to pin the manner in which the Bitcoin hash rate has continued in a constant upward trend on one simple factor like the Bitcoin halving, or even the increased efficiency of mining hardware. More than likely, it is an accumulation of several factors that are keeping the Bitcoin network hash rate so high.