After a brief downturn in May, the hash rate of the bitcoin network has hit new all-time highs. In total, miners are now producing an average of 258 exhash per second (EH/s) per day.
- According to public hashrate data, the average daily hash rate has increased by 4.41% over the past 24 hours. Just a week ago, the hash rate was as low as 188 EH/s – in other words, 188 quintillion hashes.
- The previous hash rate record was set at 251 EH/s on May 2, after which it started falling. The decline coincided with the crypto market crash of May, in which hundreds of billions of dollars were wiped out of the market, and the top ten cryptocurrencies became worthless.
- Price and hash rate share a logical relationship. As the price of bitcoin falls, bitcoin miners have less incentive to consume the energy needed to create a hash.
- Hashes are answers to an independent approximation of the cryptographic problem required to create each bitcoin block. When a correct hash is found and a block is created, the “miner” earns a reward of 6.25 bitcoins, and collects the block’s transaction fee.
- As the hash rate increases, so does Bitcoin’s difficulty algorithm, which takes about 10 minutes to mine each block.
- This process of creating blocks follows a consensus mechanism called “proof of work” because of the energy or “work” that goes into securing the network.
- Ethereum also operates in this pattern, but is planning to transition to a mechanism called “proof of stake”. This would theoretically reduce the network’s energy footprint, and increase scalability.
- According to Cambridge’s index, bitcoin currently consumes an estimated 125 terawatt-hours of electricity each year. This is much more than any other crypto network – and even some countries, such as Finland.
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