The collective computing power of the bitcoin network, also expressed as the hashrate, has recently risen to new heights. With a hash rate of no less than 74.5 Exahashes per second (EH/s), a new all-time high was reached last week. This makes the security of the bitcoin blockchain greater than ever before.
The previous record was set in August 2018 at 61.9 EH/s. That level held up reasonably well in September, but the hashrate slowly dropped in the following months.
This may be partly explained by the fact that the price of bitcoin fell sharply in November. At the beginning of November, for example, a bitcoin was still about ???????5700, but at the end of the month it was only ???????3100. In December, the price dropped even further to about $2,800 per bitcoin.
That will probably not have been a positive development for many of the miners. From one day to the next they suddenly received only half for every bitcoin they mined. This may have meant that some of the bitcoin miners were no longer profitable and were therefore forced to turn off mining equipment.
Like the price, the hashrate also fell and by December it was only half of it. With only 31 EH/s, the hashrate was at its lowest point in a long time. In the six months that followed, however, that decline was more than made up for. Records were even broken from June onwards and the growth seems to have continued since then. On July 5, the new peak of 74.5 EH/s was reached.
The hashrate plays an important role in how bitcoin works. Miners use the computing power of their equipment to compete for the so-called block rewards. That is the reward of (currently) 12.5 BTC for the miner who finds the next block in the blockchain.
What is hash rate
Finding such a block is actually a kind of repeated guessing on the answer to a complicated math problem, until the correct answer is found. A single attempt yields a so-called hash that could be the answer. The hash rate is therefore the amount of hashes, or guesses, that are made per second. A hash rate of 74.5 EH/s means that a hash is tried 74.5 trillion times (=74,500,000,000,000,000) every second.
A miner with a lot of computing power and therefore a high hashrate finds a new block on average more often than miners with a lower hashrate. A true arms race has therefore arisen among the miners to use as much computing power as possible in order to increase their earnings. As a result, the joint hashrate of the bitcoin blockchain also increases.
That costs a lot of electricity, but it is certainly not wasted money. The higher the total hashrate is, the more secure the bitcoin network becomes. After all, an attacker needs more than 50% of the total hashrate of the network to successfully carry out an attack. And given the investments in equipment and electricity that are required, this is a very expensive undertaking – often much more costly than an attack would result in.
Want to know more about bitcoin mining? Also view the graphic series about Bitcoin mining, Proof of Work and the mining difficulty or read a more detailed explanation here.
