The seven-day average hashrate of Bitcoin hit a record all-time high of 130 exahash per second (EH/s). This trend is expected to add to the inherent strength of the Bitcoin while positively influencing its price too. It augurs well for the crypto asset as many argue that a rising hashrate is a sign of a bullish run in the future.
Hashrate is the speed at which a computer completes an operation in the Blockchain code. It is a measure of the power of the computers and determines the ability to produce new coins. Signs of the increasing power of computers are taken to be an indication that miners want to produce more coins to post higher profits.
Calculating the hashrate of the Bitcoin network is done by taking an average of the previous 10 minutes as that is the time taken approximately to mine or solve. ASIC computers for Bitcoin mining can compute trillions of hashes per second and have to be extremely powerful. The higher the hashrate, the more will be the Bitcoin that can be mined.
The hashrate for Bitcoin has been on a roller coaster ride in recent times, as shown by data from charts.Bitcoin.com. Before this present peak, the previous high was 127 EH/s recorded on July 28. It dropped sharply on May 11 to 90 EH/s after the last halving. This is attributed to miners closing shop as they did not find mining economically viable with their outdated and inefficient mining rigs.
Fortunately, this fall turned out to be a temporary phenomenon. Miners came back to the network even as Bitcoin planned supply cut lowered miner bonuses by half to 6.25 BTC per block. The hashrate has thereafter grown from strength to strength and has taken a quantum leap of 77% since August 10, 2019.
The silver lining is that the Bitcoin network is secured against 51% attacks when more computing power is committed by miners to producing Bitcoin. It acts as a buffer against rogue miners who want to defraud the system and double-spend some coins.
A clear correlation between rising hashrate and the price of Bitcoin is yet to be established. Philip Gradwell, an economist at Chainalysis, a Blockchain intelligence firm, feels that price increases are not always followed by hashrate increase. He says, “Miners may be better at predicting the future price, but that doesn’t really cause the prices to go up.” This is borne out by the fact that even after the record rise in hashrate, Bitcoin is currently trading at $11,888, a shade lower than the glass ceiling of $12,000.