Bitcoin’s hash rate breaks another record as its price stabilizes following May’s crash.
After a brief slowdown in May, the Bitcoin network’s hash rate has rebounded to new all-time highs. In total, miners are now producing an average of 258 exahashes per second (EH/s), per day.
According to public hash rate data, the average daily hash rate has spiked by 4.41% in the past 24 hours alone. Just one week ago, the hash rate dwelled as low as 188 EH/s – in other words, 188 quintillion hashes.
The previous hash rate record was set on May 2nd at 251 EH/s, after which it began to drop off. The fall coincided with May’s crypto market crash that saw hundreds of billions of dollars wiped off the market, and a top ten cryptocurrency crumble to worthlessness.
Price and hash rate share a logical connection. As Bitcoin’s price falls, Bitcoin miners are less incentivized to consume the energy required to produce hashes.
Hashes are independent guess answers to 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 Bitcoin, and collects the block’s transaction fees.
As the hash rate increases, Bitcoin’s difficulty algorithm rises so that each block takes approximately 10 minutes to mine.
This process for creating blocks follows a consensus mechanism called “proof of work,” due to the energy or “work” that goes into securing the network.
Ethereum also operates by this method, but is planning to transition to a mechanism called “proof of stake”. This will theoretically reduce the network’s energy footprint, and increase scalability.
Bitcoin currently consumes an estimated 125 terawatt-hours of electricity each year, according to Cambridge’s index. That’s vastly more than any other crypto network – and even some countries, such as Finland.