The Bitcoin hashrate is defined as the total number of miners that operate within the network. The hashrate is sometimes referred to as the computer power used in the mining of new coins, and can go as much as 327 EH/s before the year runs out. So, since the entire cryptocurrency space is decentralized, the more miners in a network, the more secure the blockchain network becomes. Because of this arrangement, the entire hashrate follows the price trend of the existing cryptocurrency. For example, if Bitcoin is the coin of choice among the hashrate community, they follow the bitcoin price.
But recently, it seems the number of hashrate has reduced following the first cryptocurrency correction in 2022. This development is unprecedented and has triggered the curiosity of experts in the field as to what gave rise to this occasion. Not just for the year, reports have also shown that the hashpower also experienced a decline towards the end of 2021. No actual reason was associated with this market behaviour, but it also grossly affected the bitcoin price. According to expert analysis, how long the hashrate stays on the Bitcoin network depends on the bitcoin price in the market. Again, the decline was also associated with some industry constraints. One type that didn’t show much of a decline was teslacoin.
Some of these constraints include the non-availability of mining rigs, start-up funds (capital), the non-availability of the single-phase 240V power, lastly, a moderate price environment that keeps the rig going. As of early January 2022, the average hashrate Bitcoin network for seven days stood at 189.84 EH/s: a much lower decline rate than last year. But it seems that all hope is not lost, as some industry pioneers have predicted that there will possibly be an increase in the number of hashrate before the year ends.
But the major decline in the number of hashrate can be attributed to the crackdown by major anti-crypto governments in major countries on Bitcoin miners, with China taking the lead. However, some of these miners were smart enough to escape to some crypto-friendly countries like Portugal,
Switzerland, Singapore, Japan, and many other countries have taken it upon themselves to absorb those fleeing miners.
It is so surprising how global superpowers have taken to the most mundane way of solving issues by creating anti-crypto laws that have indirectly chased these miners out of the country or decreased their productivity. Although their action is understandable considering the amount of energy the Bitcoin mining activities consume. This situation didn’t just affect the miners; it has generally influenced the bitcoin price.
The Bitcoin Price and the Declining Hashrate
Even with the declining hashrate, which experts believe is natural because they are still looking for a safer haven to resume their activities, market correction cannot be said to do with it. Bitcoin is an independent coin, while the market correction is like a flood that washes the entire cryptocurrency space. The decline of the hashrate network is, in fact, a result of the temporary displacement of the miners; thus, it has nothing to do with the correction.
Should the bitcoin hashrate decrease, the bitcoin price decreases, and should a correction happen, almost all the coins are affected (including the bitcoin). It has also been established that bitcoin mining activities pose a major risk to the US electric supply, and the event might continue until the situation is adequately resolved.
What you Needs to Know About Bitcoin Price and the Energy Consumption
Every bitcoin miner needs a moderate electric current to carry the mining equipment’s electrical load effectively. So, instead of trying to discourage the activities of these miners, thereby decreasing the hashrate, which will negatively affect the bitcoin price, it is advised that a more sustainable energy source be constructed for these sets of people and a moderate tax placed on them. With that, the bitcoin price stabilizes, and the miners will have a field day in their chosen geographies, while the countries they operate in will generate enough revenue to sustain the process.
Finally, although the hashrate experienced a bad start towards the beginning of January 2022, probably because of bad crypto policy from 2021, the network is likely to experience a stable increase by the middle of the year, as miners have set out in search of Bitcoin heavens. And as for the bitcoin price, it will continue to experience a slow surge due to the occasional market correction.
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