Bitcoin’s hash rate has spiked to a record high of 62 Exahash/s as of 26 August 2018, where an Exahash is equivalent to 1,000 Petahash, and a Petahash equals 1,000 Terahash. The previous record high was 54 Exahash/s on 10 August. This continues the long-term trend of Bitcoin’s hash rate exponentially increasing. To put this in perspective, up until the second half of 2013, hash rate was less than 100 Terahash/s.
It may seem somewhat surprising that Bitcoin’s hash rate is hitting record highs even though the price is near a low for 2018. In the middle of August, this was as low as USD 5,800, after hitting USD 20,000 in December 2017. Bitcoin has rallied and is sitting at USD 7,100 as of this writing. Perhaps this price increase, combined with expectations that price will increase even more, has allowed miners to switch on rigs that had become unprofitable. Additionally, with an increasing price, miners have more motivation to purchase and install more rigs.
The spike in hash rate this past week has been rapid, from 45 Exahash/s to 62 Exahash/s. This is perhaps indicative of a mining supersite being switched on. A past article on Bitcoin News discussed how mining supersites were being developed for USD 0.5-1 billion by big mining companies like Bitmain, and these supersites would cause an extreme spike in mining hash rate and difficulty that could make small mining operations unprofitable and obsolete. Indeed, mining difficulty is higher than ever at 6.7 trillion, and next time it updates it should be well above 7 trillion. The era of personal Bitcoin mining could be coming to an end quite soon.
Bitcoin’s mining hash rate is one of the best measures of the network effect, where more hash rate means more investment into Bitcoin’s infrastructure in expectation of future price increases. The spike in hash rate is enough to cause speculation and an increase in Bitcoin’s price, like the market has seen this past week. It’s somewhat of a feedback loop, higher hash rate means a higher network effect, which makes investors buy more Bitcoin, and that leads to more profitable mining conditions and therefore an even higher hash rate.
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