That the crypto market was under the sword in the last two weeks is true. Bitcoin prices tanked to multi-month lows but is slowly recovering, reeling back after a bear maul. While Bitcoin snaps back, some other details are also emerging.
Hash Rate Drops
According to discoveries from TokenAnalyst, the number of Bitcoin blocks mined from between Mar 10th and 20th dropped to 16,550 from the expected 19,800 minutes based on an estimation of a 10 minutes block generation time.
That means, within that time of price and hash rate slumps, the average generation time rose by 1.9 minutes to 10 minutes.
But it gets grimmer for the world’s most valuable coin. The 7-day moving average for the network’s hash rate fell to 94.6 EH/s from 120.6 EH/s.
Computing Power Is Vital for Bitcoin’s Survival
Given that price leads hash rate which is determined by miner profitability, this data confirms that in the face of free-falling asset prices, profitability dipped and it is highly likely that weak miners were shaken out of business.
Hash rate is an important metric for Proof-of-Work consensus algorithm networks, of which Bitcoin is a prime example. The higher it is, the more secure the network is, and the more it becomes robust against 51% percent attacks.
In recent years, several prominent blockchains that use the Proof-of-Work for transaction confirmation have been successfully attacked and coins spent. Ethereum Classic, Bitcoin Gold, and up-to a dozen other blockchains are also victims.
Chances of Bitcoin being attacked are low unless it is a government-sponsored attack.
Bitcoin difficulty may drop by 15%
Now, since Bitcoin is self-regulating and autonomous, the Bitcoin Difficulty Adjustment scheduled in less than four days from now will likely slash the network’s mining difficulty levels by as much as 13% to 15%.
This will be the 3rd or 4th single largest difficulty adjustment in Bitcoin’s 11-year history.
“So the next difficulty adjustment due in 4 days will reduce difficulty by 13-15%, assuming nothing changes. This will likely be the 3rd or 4th greatest reduction in difficulty in Bitcoin history.”
So the next difficulty adjustment due in 4 days will reduce difficulty by 13-15%, assuming nothing changes. This will likely be the 3rd or 4th greatest reduction in difficulty in Bitcoin history pic.twitter.com/VdghyKvEfR
— nic "stomp the curve" carter (@nic__carter) March 21, 2020
Bitcoin difficulty keeps block generation time at 10 minutes, decentralizing the network as many people can simultaneously run nodes, confirming transactions and securing the network.
If the Bitcoin difficulty level is too high with insufficient hash rate, it will take longer for transactions to process.
“DA is what keeps the block time at 10 minutes average. Why a 10 minute block time you might ask? Because the amount of data required to be verified to run a node must be kept small, so as many people can run nodes as possible (decentralized network)!”