The Bitcoin network and its hash rate has just taken a steep plummet and is now down by more than 45% from its 2020 peak. The BTC hash rate drops again and sank from 136.2 quintillion hashes per second (EH/s) on March 1 to 7.5 7.5.7 EH/s today, March 26, according to data from Blockchain.com.
Coindance, which is another analytics site measuring the coin’s blockchain – reveals a similar pattern, but maybe a less stark one. The website revealed a 2020 peak of roughly 150 EH/s on March 5, which went down to 105.6 EH/s today – measuring a 29% increase.
As you probably know if you read our crypto news, the hash rate of a cryptocurrency is a parameter that gives the measure of the number of calculations that a given network can perform with each second. A higher hash rate basically means that there is greater competition among miners in validating new blocks. Now that the BTC hash rate drops again, the number of resources needed for performing a 51% attack on the network has decreased, making the network more vulnerable.
After a volatile month when Bitcoin saw dramatic and short-lived losses of as high as 60% to a price of $3,600 in mid-March, the network and its difficulty yesterday decreased by close to 16%. The BTC hash rate drops again and is a major topic in the Bitcoin price news now.
The difficulty, or how challenging it is to solve and validate a block on the blockchain – is set to adjust every 2016 blocks (roughly two weeks) in order to maintain a consistent 10 minute block verification time.
All of this has a close connection to the hash rate of the network. Typically, when the network sees a lower level of participating mining power, the difficulty will tumble. In periods of intense network participation, it would rise and work as a counterbalancing mechanism.
As the BTC hash rate drops, we can see that the relationship between price, hash rate and difficulty is still something that generates a trend that some analysts refer to as a “miners capitulation cycle.” The theory is that while the BTC price remains high and mining is profitable, the hash rate and difficulty both go upwards until they reach a threshold at which miners are squeezed and liquidate more of their holdings in order to cover their expenses.
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