Currently, Bitcoin price is not very favorable for cryptocurrency miners. Those, who own older mining hardware, are slowly, but surely withdrawing from cryptocurrency market. It can be proven by Bitcoin’s hashrate, which decreased by almost 40% in the last month.
What is Bitcoin hashrate?
Bitcoin hashrate is perceived as a factor and indicator, that tells us - cryptocurrency industry members - about network security. The more Bitcoin miners supports network, the more it is decentralized.
By Bitcoin hashrate we also determine the speed of BTC block mining. The higher the computing power we own, the faster it will happen. The way the Bitcoin system was created, allows users to extract one block in every 10 minutes. After 216 blocks are mined (approximately 2 weeks), network checks if everything is done according to the system’s assumption.
If there are more Bitcoin miners taking part in the extraction process, the blocks starts to be unlocked more often. By doing that, the difficulty of extracting Bitcoins raises. However, if members of cryptocurrency industry, that take part in the coins extraction, will leave the market and computing power drops, BTC blocks will be mined much slower than in 10 minutes. This in turn, may result in the difficulty of mining Bitcoins being reduced.
Market’s crisis and BTC hashrate drop
There are many things, that affect Bitcoin mining profitability. Bitcoin price itself is one of them, which lately is not looking very well. Only this month, leading cryptocurrency has lost almost 50% of its value. Bitcoin price dropped from the level of 9 000 USD to almost 5 300 USD.
According to the Skew Tweet, in this month, Bitcoin’s hashrate has fallen by 40%. It is very disturbing, considering the fact, that Bitcoin halving will happen in the nearest future. The halving itself will reduce the miners pay for their work by half.
If the BTC price will follow its latest, big price drops, miners will not receive a quick return from their investment after halving. Some time ago, Chris Zhu - co-founder of the Poolin mining pool, has spoken about that. He said, that he was counting for the hashrate to drop by 20-30% in upcoming few months. He explained, that this would reduce the mining difficulty. This in turn, will result operators might be able to extract more BTC.
According to the data from bitinfocharts.com, current BTC hashrate is about 97 EH/s.