China’s clampdown on Bitcoin mining last year had a negative impact on the hashrate. At that time, this indicator defied its macro up-trend and sunk down to multi-year low levels. The scars were so deep, that people from the space started referring to May-June 2021 as ‘the great hashrate plunge’ period.
Post that, in July, the mining hashrate started its recovery. From hovering in the 60-80 EH/s bracket back then, this indicator peaked on Saturday at 263.24 EH/s. Data from CoinWarz brought to light the same. At press time, the number had deviated slightly from its ATH level but was hovering in and around the same 250-260 EH/s threshold.
As can be seen from the chart below, Bitcoin’s hash power has never been higher than this point in its history.
Hashrate and its significance
Hashrate, as such, is the measure of computational power used to verify transactions and add blocks in a Proof of Work blockchain. It typically represents the number of individuals or entities taking part in the process of mining. Basically, the more people mining Bitcoin, the higher is the hashrate.
The mining process, essentially involves miners solving complex computational puzzles to add blocks to the blockchain. The same is directly correlated with the security of the network.
As highlighted in an earlier article, miners have an incentive to mine – they are rewarded with a set number of coins every time a new block is mined. Apart from incentivizing miners, this system of rewards ensures that the integrity of the blockchain network is upheld.
Pool wise distribution
With Bitcoin’s hashrate increasing, the top mining pool was Foundry USA, accounting for 21.1% of the global hashrate over the past week. AntPool, F2Pool, and Binance Pool followed next, consuming 15.1%, 12.1%, and 11.3% respectively.
What is a good rate hashrate for Bitcoin mining?
Hash rate is quite an important tangent when it comes to BTC mining. As such, miners are constantly in competition with other miners to be the first to generate a valid hash. In the said process, they aim to solve puzzles as quickly as possible.
Technically, if they’re using equipment with a hash rate that is lower than their competition, they wouldn’t be able to get ahead in the race with others who use more power. Thus, the higher the hash rate, the better.
Having said that, it should also be noted that there have been instances in the recent past—like the one in January this year—where solo miners have scripted history by cracking the puzzle and winning rewards using minimal power.