Having dropped a couple of days back, the bitcoin network hashrate is seen to be on the move again, this time, upwards. This comes amid a price crash situation that bitcoin recently fell into which has sent its price slumping below critical levels that haven’t been seen for past months. Meanwhile, the Bitcoin network hash rate has maintained itself within stable limits and has now successfully scaled through critical points.
On Friday, 26th September 2019 at 03:00 EST, the bitcoin network hash rate measured in TH/s was 108,464,285. According to statistic, the hash rate had dipped by almost 40% days back to around 57 quintillion hashes per second. As this remarkable resurrection creates a mixed feeling among analysts, some expressed happiness and hope while some, surprises and pessimism about the future of this mining metric and how it will possibly affect the price of bitcoin in the long run, particularly after the expected May 2020 halving.
Analysts Show Concern
According to Popular crypto influencer, Anthony Pompliano, an increasing bitcoin network hash rate means more security. In his recent tweet, he expressed certainty in the fact that the most secure computing network just got more secured!
Bitcoin’s hashrate just hit another all-time high.
— Pomp ? (@APompliano) September 27, 2019
Other renowned crypto twitter figures like Mati Greenspan and Mia Tham also tweeted similar sentiments, all of which express their pleasure in the development.
Bitcoin hashrate back at all time highs!!
Miners are clearly not being deterred by this week's price action. ?? pic.twitter.com/87R9so5SaN
— Mati Greenspan (@MatiGreenspan) September 27, 2019
What Is Hash Rate And How It Affects Bitcoin Price?
The hash rate is the estimated number of tera hashes the bitcoin network performs per second. It is a measure of the most recent amount of computational power used to create new blocks, the process of which leads to earning newly minted Bitcoins. At the moment, the block reward associated with mining is 12.5 BTC and this is expected to be halved by the network in May 2020.
The results of recent findings showed that bitcoin price shows great correlation with its network’s hash rate. As price falls, the hash rates have been observed to fall correspondingly. The reason, according to findings is evident: at lower bitcoin prices, miners get fewer profits and most mines are forced to close down. And as the price recovers, they tend to resume business, a condition which causes higher hash rates.
Further, the block halving scenario might become a great negative influence on bitcoin’s price. Halved bitcoin block rewards mean greater competition between miners. The competition will force out smaller mines which will ultimately reduce the hash rates, a condition which exposes the bitcoin network to a 51% attack and in time affects the price of bitcoin negatively.
The argument can be made feasible by considering the resulting price of Litecoin after its block reward halving in August. The price of Litecoin had shown no much improvement following the halving event and later dropped by almost 20%. At present, Litecoin is trading at $55.05.