Triggered by China’s campaign against the mining scene, the Bitcoin hash rate went down. But now there is improvement in sight.
China’s restrictive approach has undoubtedly left its mark on the Bitcoin network. But now there are increasing signs that things are looking up again. An important indicator for this is the Bitcoin hash rate. Because one thing is clear: the higher the hash rate, the more secure the network is against attacks from outside.
Bitcoin inventor Satoshi Nakamoto determined that the Bitcoin protocol adjusts every 2,016 blocks to maintain the 10-minute cut in block discovery. This always depends on the number of miners and the processing power on the blockchain at the time of the adjustment. China’s crackdown on bitcoin mining has previously led to several disruptions on the BTC network. Miners were forced to shut down their computers and leave the region to continue their business. Accordingly, the hash rate as well as the mining difficulty also went down the drain.
Analytical data also shows that at the height of the Chinese crackdowns, the BTC network experienced the slowest block production in history and miners lost a significant portion of their revenue. During this period, only 58 new bitcoin blocks were mined, instead of 144 as originally planned. In addition, miner revenue fell from an all-time high of $70 million in May to $13 million in June. This represents a drop of more than 80 percent in one month.
Hash rate currently on a clear upward trend again
However, this bottom seems to have been passed in the meantime. Many miners have already pitched their tents in other, more crypto-friendly regions such as Europe and the United States to resume their activities. In doing so, they have reduced China’s dominance in the space and made the Bitcoin network more decentralized. Whether Beijing is actually happy about this is another matter. In any case, the hash rate has been on the upswing again. So far, the hash rate has doubled since the low point in June. Data from Bitinfocharts shows that the network’s processing power has climbed back up to over 130 EH/s, a 100 percent increase from the low of around 67 EH/s two months ago.
This also has an impact on the mining Difficulty. In line with the increase in the hash rate, it has been climbing steadily, up 13 percent since last Wednesday alone. Judging by the current trend, this is by no means the end of the line, even if it is still a long way to the peak from the month of May.