The combined computing power of the bitcoin network, also expressed as the hashrate, has recently risen to new heights. With a hashrate of no less than 74.5 Exahashes per second (EH / s), a new record high was reached last week. This means that the safety of the bitcoin blockchain is greater than ever before.
The previous record was achieved in August 2018 and stood at 61.9 EH / s. That level held up fairly well in September, but in the following months the hashrate slowly declined.
This can partly be explained by the fact that the price of bitcoin fell sharply in November. At the beginning of November, for example, a bitcoin amounted to around $ 6400, but at the end of the month it was just $ 3490. In December the price dropped even further to around $ 3150 per bitcoin.
That was not a positive development for many of the miners. From one day to the next, they suddenly got only half for every bitcoin they drove. This may have resulted in some of the bitcoin miners no longer being profitable and therefore having to switch off mining equipment.
Just like the price, the hashrate also dropped and in December only half of it was left. With only 31 EH / s, the hashrate was at the lowest point in a long time. In the six months that followed, however, the decline was more than made up for. From June even records were broken and the growth seems to have continued since then. The new high of 74.5 EH / s was achieved on 5 July.
The hashrate plays an important role for the operation of bitcoin. Miners use the computing power of their equipment to compete for the so-called block rewards. That is the (currently) reward of 12.5 BTC for the miner that finds the next block in the blockchain.
What is hashrate?
Finding such a block is actually a sort of repeated guessing on the answer of a complicated math sum, until the correct answer is found. A single attempt yields a so-called hash that could be the answer. The hashrate is therefore the amount of hashes, or gambling attempts, that are done per second. A hashrate of 74.5 EH / s means that a hash is tried out 74.5 trillion times (= 74.500 million million).
A miner with a lot of computing power and therefore a high hashrate finds a new block more often than miners with a lower hashrate. A true arms race has therefore arisen among the miners to use as much computing power as possible to increase their earnings. This also increases the joint hashrate of the bitcoin blockchain.
That costs a lot of electricity, but it is certainly not wasted money. The higher the total hashrate, the more secure the bitcoin network becomes. After all, a malicious person needs more than 50% of the total hashrate of the network to successfully carry out an attack. And given the investments in equipment and electricity that are needed, that is a very expensive undertaking – often much more expensive than a possible attack would result.