Bitcoin Network Hash rate dropping by 40% day before yesterday is probably a reporting issue. As per data from leading data provider Coin.dance Bitcoin’s hashrate plummeted from over 98,000,000 TH/s to 57,700,000 TH/s.
Is a Bullish Price Trend Ahead?
The flash drop remained unexplained and the more astonishing part was that Bitcoin network’s record-breaking string of new all-time high hash rates throughout summer.
A higher hash rate means greater competition among miners to validate new blocks. Further, it also increases the number of resources needed for performing a 51% attack, thus, making the network more secure.
Throughout summer, cryptocurrency analysts had time and again argued that the network’s record-breaking streak of all-time hash rate high indicated a bullish price trend.
Further, in August, Bitcoin investor Max Keiser said that.
“Price follows hashrate and hashrate chart continues its 9 yr bull market.”
James Prestwich, Founder of Summa said that the sudden drop in hash rate is not real. It is just a case of long block intervals being overrepresented in a fixed-period sampling. It is due to the fact that interval is pretty long. Further, an 18-minute block has approximately the same likelihood as a 2- minute block. However, it affects time-based sampling 9 times more.
Senior Market Analysts, Mati Greenspan agreed with Prestwich and said that he is not quite familiar with workings of the same. He further questioned that can someone having background knowledge of the same explain this.
Further, leading derivatives trader and YouTube content creator, Tone Vayes said that it is pretty sure that Bitcoin hash rate did not drop 30%, and it is more likely a reporting issue.
However, the hashrate has bounced back as Mati Greenspan has tweeted –
Also, the November of 2017 saw Bitcoin hashrate drop by almost 50% and was further accompanied by a slowed transaction processing times, a price dip and miners shifting to Bitcoin Cash (BCH) network.
Litecoin Hashrate Shows Steep Drop
Earlier, this month Litecoin hashrate dropped to 40 %. The reason for the same was touted to be the halving of the block reward on the 5th of August.
Notwithstanding, the drop in price and the vulnerable position that the platform is in after halving, a negative attitude towards altcoins is also a key factor for a weak LTC market price. Furthermore, the crypto was a victim was of “dusting attack” on the 10th of August, just 5 days after the Litecoin underwent reward halving.
Mining Litecoin is also not as profitable as the obsolete L3 miner no longer serves the purpose and provides no competitive edge for block discovery. Also, 12.5 LTC per block is too small an amount for miners to continue their mining operations keeping in mind the electricity costs incurred in mining.
Will Bitcoin reverse its price cycle and make a bullish move? Will an increase in hashrate for altcoins also mark a shift in mining activities? Let us know what you think?
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Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.