While increasing the hash rate makes the Bitcoin network more secure, there are many factors that affect this speed.
low prices for mining equipment
Hashrate refers to the processing power required by Bitcoin miners to mine a block. As a result, higher hash rates require more powerful mining hardware, which can help miners mine blocks and earn mining rewards.
As global markets recover from the 2022 chip shortage, prices for graphics processing units (GPUs), a key component of mining rigs, have fallen to reasonable levels. Low GPU prices initially helped miners offset operating costs in the ongoing bear market.
GPU pricing update as of September 2022 Source: Techspot
In addition, mining equipment providers such as Bitmain have lowered the prices of Antminers in order to return profits to cryptocurrency miners. However, the ROI, as previously reported by Cointelegraph, could be around 11 months for large miners and 15 months for retail miners.
Bitcoin miners continue to take advantage of lower mining hardware prices to upgrade their hardware as they strive to stay competitive in the face of fierce competition. In addition, major crypto companies such as Grayscale have announced plans to invest in Bitcoin mining hardware.
Increasing the number of crypto-friendly jurisdictions
Since China has imposed a complete ban on cryptocurrency trading and mining, other countries have decided to help the missing Chinese miners by providing asylum in their jurisdictions.
Countries including Kazakhstan, Canada, and Germany were among the first to choose bitcoin miners when it came to relocating their mining operations. As a result, bitcoin mining is becoming more decentralized as it becomes less dependent on China.
However, data from the Cambridge Center for Alternative Finance showed that China had resumed mining just three months after the ban was introduced, further spurring bitcoin hash rates.
The United States currently leads as the largest source of bitcoin hashing, with Georgia leading at 30.8%, followed by Texas (11.2%), Kentucky (10.9%) and New York (9.8%) .
Merger: Ethereum turns into Proof-of-Stake
Ethereum recently moved from a Proof of Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism following a merge update. As a result, Ethereum no longer supports the use of GPUs for mining.
The sudden change in mining mechanism naturally forced Ethereum miners to sell or reuse their bitcoin mining hardware.
Despite increased network security, high hash rates may be cause for concern as dollar mining revenues struggle to recover amid the ongoing bear market.