Bitcoin (BTC) seems to be on everyone’s minds lately, as the world recently witnessed the price of BTC take an unexpected bearish reversal this month. On January 21, 2022, Bitcoin reached a six-month low, falling below $ 40,000 for the first time in several months.
While some panicked, other industry experts point out that the Bitcoin network is stronger than ever. The growth in the Bitcoin network is becoming clear as the BTC hash rate figures continue to reach new heights this month. For example, on January 22, the BTC network reached an all-time high of 26.643 trillion with an average hash rate of 190.71 exahs per second (EH / s).
The hash rate will continue to grow, and that’s a good thing.
Samir Tabbar, chief strategist at Bit Digital – a listed bitcoin mining company – told Cointelegraph that the BTC hash rate indicates the amount of computing power allocated to the network at any given time. Tabar explained that when it comes to bitcoin mining, a higher hash rate means a good hash rate. “The more computing power that goes into maintaining the network, the more secure it is and the more transactions that will be processed,” Tabar said.
As such, the recent Bitcoin hash rate is quite impressive, although the price of BTC is falling. Peter Wall, CEO of mining company Argo Blockchain for cryptocurrency, told Cointelegraph that he was not surprised to see the BTC hash rate approach 200 EH / s. Wall also mentioned that even with events that have disrupted bitcoin mining rates recently, such as the political unrest in Kazakhstan, the hash rate will continue to increase every month:
“The Argo Blockchain mining margin last year in 2021, which is our revenue minus our direct costs, was over 80%. It was a very good year for miners. In 2020, when bitcoin prices were much lower, our margin was 41%. So I think this year we will continue to see strong margins in the room despite the recent decline in the price of bitcoin and the increase in the hash rate. ”
Darren Feinstein, co-founder and co-chairman of Core Scientific – a major provider of publicly traded blockchain infrastructure – told Cointelegraph that based on previous bitcoin hash rate data, the BTC network grew by 200% following the emigration of miners from China. :
“A year ago, the Bitcoin network speed was around 143 EH / s. After the mining ban in China, the network speed dropped to 63 EH / s. Today, the hash speed has risen to around 198 EH / s. This latest increase represents three important indicators. First there is an increase in network hash rate of 130 EH. the energy used in China “. .
With this in mind, Feinstein notes that while the BTC network has achieved record EH / s thanks to significant improvements in chip mining technology and geo-distribution outside China, the network is currently the most efficient and resilient ever. Feinstein added that these data are important because they show how much energy each terahash uses, which is usually represented by a scale called joules / terahash. He noted that this percentage has decreased significantly in recent years, indicating a significant increase in energy efficiency in mining.
Bitcoin mining efficiency chart. Source: Darren Feinstein.
Will infrastructure support network growth?
Michael Levitt, co-founder, chairman and CEO of Core Scientific, told Cointelegraph that he fully expects the global BTC hash rate to continue to grow at a robust pace.
Levitt stated, however, that this growth depends on the movement of the price of bitcoin, as well as the success of the infrastructure that is currently being built. “The expected amount of infrastructure will depend on the problems in the global supply chain,” he said.
Feinstein added that infrastructure is the biggest challenge when it comes to bitcoin mining. The obstacles to bitcoin mining are land, energy, hardware and ultimately infrastructure. There is a lot of ASIC hardware that can be bought, and electricity and land are also easily accessible, but miners need a place to supply electricity, and historically this is where miners have problems. ”
North America has become one of the largest centers of bitcoin mining in the world, according to the Cambridge Bitcoin Electricity Consumption Index, which shows,