When market indicators suggest trouble, and the value of Bitcoin faces fluctuations, the computational power of the Bitcoin network, known as hashrate, continues to rise. What does this mean for us and why is it so important? Let’s take a closer look.
The hashrate indicator in the cryptocurrency world refers to the total computational power that miners introduce to the blockchain network, in this case – to the Bitcoin network. It is a key network security indicator. The higher the computational power, the harder it is to carry out, for instance, a 51% attack, meaning to control the majority of the computational power in the network.
It is crucial that this power is adequately decentralized. There was concern over the emergence of large public miners, which could threaten decentralization. However, the latest data indicates that these public entities control only 28% of the global hashrate, which for now does not raise concerns.
When the hashrate indicator rises, it means that more and more miners are joining the network, seeing its potential. A decrease in the indicator could suggest that some miners are disconnecting, likely due to the unprofitability of mining at that time.
Analysis of the past year shows that the 7-day average computational power of the Bitcoin network has been steadily increasing. Although the value of BTC experienced some fluctuations, miners clearly wanted to expand their computational capabilities. Their revenues mainly depend on the cryptocurrency price, even though block rewards are fixed in BTC; their value in US dollars is variable.
It may be surprising that despite record-level competition and price declines, miners haven’t lost faith in the assets. On the contrary, they are investing even more in their mining ventures.
One can’t forget about the price of Bitcoin, which recently struggled to return to growth, hovering around the level of 27,700 dollars.
In the context of all this information, it’s important to understand that trust in technology, such as blockchain and Bitcoin cryptocurrency, isn’t solely based on its current market value. This is confirmed by the hashrate – an indicator that shows miners believe in the future and potential of this digital gold.
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