Net network hash rate of the leading cryptocurrency Bitcoin [BTC] has just taken an another steep plummet & is presently down to almost 45% from its 2020 peak highs.
Another renowned analytics site for the coin’s blockchain named Coin Metrics- also revealed an identical pattern, if less stark. The website reported a 2020 peak of roughly 150 EH/s earlier on 5th March, today down to 105.6 EH/s – which is directly around ‘29%‘ fall.
Network Hash-Rate & Difficulty Levels
The hash rate of a cryptocurrency is a parameter that provides the measure of the sum of calculations that a given network can perform each second.
A much higher hash rate simply means a greater competition among miners to validate upcoming new blocks; it also increases the amount of resources required for performing a 51% attack, ensuring the network’s security.
After a volatile month during which Bitcoin saw dramatic, if short-lived, losses of as high as around 60% to as low as $3,600 USD earlier in the mid of this month, the network’s difficulty yesterday ‘decreased‘ by near to around 16%.
As per a ‘recent‘ report, the last downward adjustment in difficulty was observed earlier on 25th February this year, when the crypto’s price was hovering around $9,900 USD. Just three days later, it dropped to around $8,800 USD, and then lately by 14th March, it unexpectedly dropped to around $4,800 USD – and even as low as $3,600 USD on some exchanges, as noted above.
The relationship theory between price, hash rate, and difficulty interpret that while Bitcoin’s price remains high, & mining is profitable, both hash rate and difficulty inch upwards until they reach a threshold at which miners are squeezed & made to liquidate more and more of their holdings to hide their expenses – resulting in an hiked supply of the Bitcoin into the market.
The capitulation point – at which some can not afford to serve mining altogether – then involves a decline in hash rate – as can be seen today – and a subsequent reset within the network’s difficulty.
In line with the recent data provided by btc.com, Bitcoin’s difficulty is presently ‘predicted‘ to further decrease by around 16% within the upcoming 14 days’ time period.