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3 reasons to keep breaking Bitcoin network hash rate records

۳ دلیل برای ادامه پیدا کردن رکوردشکنی‌های هش ریت شبکه بیت کوین

Bitcoin’s hash rate has been growing steadily over the past months and has increased its record several times; But what factors can contribute to the continuation of the record-breaking process of the Bitcoin network hash rate?

To Report Cointelegraph, since the beginning of October (October 9), the hash rate of the Bitcoin network has increased by 10.8% and a new record has been set during this period (on a one-day basis). The increase in hash rate makes the Bitcoin network more powerful in terms of security as a whole, and various factors influence the fluctuation of this index.

3 reasons to keep breaking Bitcoin network hash rate records
Bitcoin Hash Rate Chart.

Reducing the price of mining equipment

Hash rate actually measures the total processing power that miners have dedicated to extracting network blocks. Therefore, the growth of hashrate requires more powerful (or more) mining machines, which help miners to mine more blocks and get bigger rewards.

As global market conditions improve after the 2022 chip shortage, the price of graphics processors (GPUs), a key component of mining rigs (for cryptocurrencies other than Bitcoin), has come down to a reasonable amount.

Along with GPUs, which are mainly used to mine digital currencies other than Bitcoin, some manufacturers of ESIC Bitcoin miners, such as Bitmain, have also reduced the price of their devices. The low price of mining devices helps miners to cover their operating costs more easily. However, as previously reported, the payback period for Bitcoin mining in the current conditions is about 11 months for large-scale operations and about 15 months for small farms.

3 reasons to keep breaking Bitcoin network hash rate records
ASIC price index; The price of the most efficient bitcoin miner in terms of dollar cost per terabyte per second of processing power.

Bitcoin miners use the low price of miner devices to upgrade their equipment in order to be able to continue their activities in this highly competitive environment. It should be noted that the Grayscale investment company recently announced the launch of a special fund for investing in Bitcoin mining hardware.

The growth of the number of countries in favor of digital currencies

Ever since China banned the trading and mining of digital currencies, other countries have started providing facilities to host Chinese miners out of the country. During this time, Kazakhstan, Canada and Germany have been among the first choices of Chinese miners to immigrate and re-establish their business. As a result of these migrations, Bitcoin mining became more decentralized and its dependence on miners based in China became less.

3 reasons to keep breaking Bitcoin network hash rate records
Each country’s share of the hash rate of the Bitcoin network until the beginning of 2022.

Data from Cambridge University’s Alternative Finance Research Center also shows that some China-based miners have resumed their activity just three months after the restrictions were announced, which largely contributes to the increase in Bitcoin’s hash rate.

Marj Ethereum and changing the network mechanism to proof of stake

Less than a month ago, with the implementation of Marj’s update, the Ethereum network mechanism changed from a proof-of-work (PoW) based model that depended on miners to a proof-of-stake (PoS) model. In other words, after this update, miners were no longer able to mine this digital currency using their GPUs.

This change can naturally encourage a part of Ethereum miners who intend to continue their activity in the mining industry to sell their GPUs and get ASIC miners for Bitcoin mining. Of course, this action is only one of the options for former Ethereum miners, and some of them have already decided to keep their graphics rigs and mine other digital currencies that can be mined with this equipment.

Despite the increase in network security, an increase in the hash rate can make Bitcoin mining more difficult than in previous periods, and this issue has a negative impact on the income of miners of this digital currency. In addition, the current bearish market and the fall in the price of Bitcoin over the past months have had a significant negative impact on the miners’ income so far.

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