Bitcoin recovers its hashrate after several weeks of collapse

graphic compares behavior of hashrate, hashprie and difficulty in the bitcoin network

Key facts:
  • The hashrate went from an average of 190 EH/s to 220 EH/s, in a period of 7 days.

  • The difficulty of mining Bitcoin decreased for consecutive weeks due to the drop in hashrate.

The waters seem to return to their course. After the Bitcoin network experienced the consequences of the bear market for several weeks and the disconnection of numerous miners due to the heat wave that shook the planet, the computing power or hashrate records return to the levels of a month ago.

According to measurements from Braiins, a company that offers mining software and manages the longest running pool in the industry, the Bitcoin hashrate has seen an increase since July 22, when the most recent scheduled difficulty adjustment occurred.

Since then, the total computing capacity of the network went from an average of 190 EH/s to reach a current estimate of 220 EH/s. Consider the fact that the hashrate measurement oscillates over time, due to the common properties of a decentralized and distributed network. However, a 7-day trend can give a more accurate idea of ​​the status of that measure.

Difficulty adjustment is a mechanism that regulates the issuance of bitcoin BTC with an increase or decrease in difficulty to execute the proof of work that determines which miners will receive the BTC reward. In this way, the monetary policy of Bitcoin is maintained, which establishes an emission figure close to 900 BTC per day.

graphic compares behavior of hashrate, hashprie and difficulty in the bitcoin network
Since the last Difficulty setting you can see a growing trend of the Bitcoin hashrate. Source: Brains.

What determines these variations in the Bitcoin hashrate?

As CriptoNoticias reported in recent days, there are several factors that contribute to the total computing capacity of the network having such pronounced variations in a short time. These variations can also be broadly seen as the disconnection and reconnection of mining equipment.

The main reason for the decrease in hashrate could be related to the bear market. While most miners don’t tend to go offline because they often have tricks up their sleeves, those who don’t have a cheap power source, or high-performance equipment, may have had to turn off their equipment momentarily in view of the low profitability experienced by miners in these months.

graph shows decrease in mining difficulty at the same time bitcoin hashrate increases
In this detail, you can see how the difficulty decreased while the Bitcoin hashrate increased. Source:

However, with the increase in the price of bitcoin, this seems to be changing. In fact, the hashprice, which represents the estimated profit for miners based on the amount of hashrate they contribute to the network, increased from $0.06 to $0.11. This current figure represents 50% of the ideal values ​​for the hashprice.

Is hashrate recovery can also be understood as a sign of optimism regarding the market by Bitcoin miners.

statistics on difficulty and hashrate in bitcoin mining
The hashprice seems to be returning to the values ​​that would allow miners to be in a comfort zone in terms of industry profitability. Source: Brains.

The other important factor has to do with the recent shutdown of numerous mining farms in the United States due to the heat wavewhich lasted for a couple of weeks.

As we have reported in recent days, companies such as Compass Mining have reported that they have been forced to shut down mining equipment on farms located throughout several US states.

Weeks ago, representatives of the sector affirmed that at least 1,000 MW of electrical energy would stop flowing to farms in Texas, with which it was then estimated that the network would lose about 30EH/s of hashrate.

The current increase in total hashrate may be related to the reconnection of many of these Bitcoin mining farmsgiven that we could be close to the end of the alert due to high climatic temperatures.

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