Bitcoin Hash Rate and Difficulty Scale New All-Time Highs

The increase in hash rate, which is the computational power used to secure the network, is consistent with the trend observed at the start of 2019. The hash rate has been increasing at a fairly steady rate over every 7-day period since the beginning of the year. This figure represents the highest ever hash rate value recorded for the Bitcoin network, with the previous highest being 66 million TH/s achieved in late June 2019.

Increase in Hash Rate and Security

Typically, when the Bitcoin hash rate increases for an extended period of time, this also brings with it an increase in mining difficulty, which is the effort required to discover a new block. The 51 percent attacks on Bitcoin Cash in May and Ethereum Classic in January highlighted the dangers of low hash rate in a blockchain network. The increase in hash rate ensures greater security for the Bitcoin network, effectively making it more difficult for hackers to compromise the integrity of the network. So far in 2019, the difficulty progression has been a recurring series of climbs and flat periods. The Bitcoin difficulty is currently at the same level as in late October 2018 when it was trading at about $6,000. Reaching a new hash rate all-time high likely puts an end to any talk of mining capitulation that emerged when the hash rate fell by over 45 percent in December of 2018, after many miners ceased operations while the value of Bitcoin plummeted.

Bitcoin Rally to Continue?

While a cryptocurrency’s hash rate is often affected by its value, the converse is not necessarily true. Bitcoin shot up to above $10,000 in June 2019 and continued to reach new highs of close to $14,000 that same month. At the moment, the world’s largest digital currency is trading at $12,010 following a 9.25 percent rise over the last 24 hours. While the recovery since 2018 is impressive, it does not necessarily point towards any significant price movement in the future. At the moment, the rising price of Bitcoin is thought to be responsible for the corresponding increase in hash rate. This could potentially correspond to fewer delays in Bitcoin transactions in the short term until the difficulty is retargeted. Activity on the Bitcoin network has increased considerably of late, leading to network congestion and extremely high transaction fees. Interestingly, the Bitcoin Lightning Network has seen little growth by most measures even as prices rise. The number of active nodes increased negligibly, but the number of payment channels dropped. With increased transaction fees playing a part, do you think that the demand for mining hardware will continue to rise? Let us know in the comments below. If you are interested in trading Bitcoin (BTC) on our partner exchange, follow this link to get all set up on XCOEX.