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Hashing Power Stairway to Heaven!
Bitcoin and the cryptocurrency sector overall potentially find themselves on the verge of their greatest challenge yet. With the financial system running on inflation and seemingly unlimited debt, the global economy strains to keep pace with the coronavirus outbreak.
Some are theorizing that this could be a “final test” for cryptocurrencies before becoming established and leading financial assets – assets born out of the last economic implosion in 2008.
Despite global uncertainty, the underlying ecosystem of Bitcoin is continuing to grow. The hash rate of the Bitcoin network has exceeded levels seen since our last hash rate report back in September 2019, which stood at over 80,000 PH/s. At the time of writing today, Bitcoin’s hash rate now stands at over 120,000 PH/s (120 EH/s)!
Hash rate is a term used to measure the speed of the machines working on obtaining an alphanumeric piece of data (otherwise known as a hash) using the Proof-of-Work (PoW) algorithm. Not all cryptocurrencies are mineable, however.
The greater the hashes a machine can produce, the higher chance it has of guessing that critical number and enabling the miner to receive newly-generated coins while securing the network from attacks and generating the next block on the chain.
Crippling the Bitcoin blockchain with 51% attacks, reorganization attacks, and double-spending is harder than ever! Bitcoin’s current hashing power is almost ten times the levels seen during the height of the cryptocurrency bull market when BTC hit $20K!
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It’s calculated as follows:
1 KH/s is 1,000 (one thousand) hashes per second.
1 MH/s is 1,000,000 (one million) hashes per second.
1 GH/s is 1,000,000,000 (one billion) hashes per second.
1 TH/s is 1,000,000,000,000 (one trillion) hashes per second.
1 PH/s is 1,000,000,000,000,000 (one quadrillion) hashes per second.
1 EH/s is 1,000,000,000,000,000,000 (one quintillion) hashes per second.
1 ZH/s is 1,000,000,000,000,000,000,000 (one sextillion) hashes per second.
Mining Difficulty Combined With the Halving Event Makes Bitcoin One of the Most Scarce and Secure Assets on Earth!
The most popular alternative algorithm currently used is Proof-of-Stake (PoS). Rather than relying on a computer’s ability to crunch numbers, users stake the native digital asset of the respective blockchain to secure it and obtain newly-generated coins.
Bitcoin’s block difficulty algorithm has been in overdrive in recent years and is used to measure how difficult it is to find the needed hash to validate the current block. The difficulty algorithm adjusts approximately every two weeks or every 2016 blocks based on the current hash rate output of the network. The difficulty is designed to ensure blocks are mined at a rate of one per 10 minutes on average.
Other PoW cryptocurrencies have different time periods for generating and confirming new blocks. A new block is found on the Litecoin network every 2.5 minutes, while some other digital assets require less than a minute for new blocks to be found.
Altcoins’ Hash Rates Still Stagnant?
Last year, Litecoin surpassed Ethereum’s hash rate with an explosive breakout. Six months later, the two cryptocurrencies are now about equal. The green arrow in the image below highlights when we last covered Ethereum and Litecoin’s hash rates.
Ethereum and Litecoin’s hash rates haven’t undergone the same growth in terms of percentage that Bitcoin is currently experiencing. Ethereum is set to remove mining from its protocol as it shifts towards Ethereum 2.0, a highly-scalable solution to its current limitations.
Despite having a high percentage of long-term investors and being a popular alternative investment for crypto investors, Litecoin has also undergone a sharp decline in its hash rate output since its own halving event in August 2019. Litecoin’s hash rate since the start of 2020 has picked up, signaling that miners could once again be showing interest in LTC.
More updates on the evolution of Bitcoin and the leading altcoins’ mining ecosystems will be coming over the weeks as we witness the Bitcoin halving event in two months and potential disruption triggered by the coronavirus pandemic on mining operations.
This post is for educational purposes. All information used is referenced accordingly. This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.
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