Bitcoin’s hash rate reached a new all-time high on Sunday in its inexorable climb toward 100 million TH/s.
According to data provided by Blockchain.com, Bitcoin’s hash rate reached a new high of 94,779,758 TH/s.
This represents an increase of more than 66% compared to the same time last year and more than 196% compared to December 2018’s low of 32 million TH/s.
This hash rate is a measure of the processing power of the Bitcoin network that is provided by miners and is a good indicator of the network’s health.
A larger hash rate indicates the Bitcoin network is more secure from 51% attacks that could allow for double spendings or block reorganizations.
The larger the hash rate, the more secure the network and the more cost-prohibitive it would be to launch a 51% attack.
Malicious parties would need a vast amount of resources to control the Bitcoin blockchain.
Bitcoin has never been stronger ????
A $BTC chart often overlooked is hashrate (miner power dedicated to processing transactions).
Simply put; more hashes = a more secure & stronger blockchain.
It just made a new all-time high, up 70%+ YoY. pic.twitter.com/AYIKRUyFA0
— Bitcoin Birch ???????? (@BitcoinBirch) September 9, 2019
The increase in Bitcoin’s hash rate is related to new miners entering the market.
Companies and individuals around the world are connecting their ASIC miners (Application-Specific Integrated Circuit) to the network.
These miners receive rewards for processing transactions and securing the network.
The hash rate of the Bitcoin network is just one of the so-called fundamentals behind this digital currency. Other fundamentals include the number of transactions and the number of active addresses.
Max Keiser, a recognized Bitcoin investor tweeted yesterday:
“Bitcoin hash set to break 100 Q. This will start to become a problem for fiat as data centers dedicated to maintaining fiat systems are pulled into the BTC black hole of true value.”
#Bitcoin hash set to break 100 Q. This will start to become a problem for fiat as data centers dedicated to maintaining fiat systems are pulled into the BTC black hole of true value.
— Max Keiser, tweet poet. (@maxkeiser) September 8, 2019
2020 halving to reduce new issuance of BTC
Every single block that a group of miners finds is rewarded with 12.5 BTC – a reward that is divided between miners according to their work.
In 2020, Bitcoin is expected to undergo a “halving,” which will reduce the rewards for miners to 6.25 BTC per block.
An increase in Bitcoin’s hash rate before a halving event could be related to the expectations miners have regarding Bitcoin’s future price.
As rewards drop and difficulty increases for miners, Bitcoin’s price should grow to help miners remain competitive.
If this doesn’t happen, miners will stop operating at a loss and they will eventually turn off their ASIC machines.
This would generate a hash rate reduction that would consequently impact difficulty, which is expected to adjust to the downside.
Afterward, new miners would be able to enter the market and help Bitcoin’s hash rate increase once again.
This is what happened in December 2018. Despite Bitcoin’s bear market, the hash rate was reaching new highs, meaning that miners were entering the space even when the price of Bitcoin was not showing signs of recovery.
Ultimately, they were unable to remain profitable due to the higher difficulty and lower Bitcoin price and had to stop operating when BTC dropped under $3,200.
Several cryptocurrency enthusiasts have been tweeting about this new Bitcoin network milestone.
— Bitcoin Master (@drei4u) September 9, 2019
Bitcoin, last week:
– $1 billion transaction (94,504 BTC) for $700
– Hashrate breaks all-time high
– Casa releases Sats App for all
– Dominance hits 71%
– @Bakkt Warehouse opens
– @Jack advocates bitcoin
– Argentina impose capital control
– @Trezor enables N of M recovery seeds
— XT.com Exchange (@XTexchange) September 9, 2019
This shows how important the hash rate is for the whole Bitcoin blockchain and what it means in terms of security and future price expectations.