The demand for bitcoin mining has never been greater, with the hash rate and the network difficulty reaching a new all-time high. Bitcoin mining power jumped from about 230 to 260 exahashs per second, one of the biggest jumps in years.
The difficulty, a network calculation to determine how many math equations must be completed to receive the block reward in ten minutes, has also increased to nearly 34 trillion.
It’s still unclear what exactly triggered the rally, or if there was a specific event, but new mining facilities are still coming to market, with the Bitech mining be the last to request an Initial Public Offering (IPO).
Mining companies are booming, indicating the variety in the industry, and Core Scientific, a giant mining company, also recently unveiled an expansion:
“The company expanded its fleet of self-mining servers to approximately 130,000 in September, increasing the hashrate to approximately 13 EH/s. The company expects to deploy approximately 38,000 additional self-mining ASIC servers by the end of 2022.”
Ethereum
One of the most intriguing hypotheses for Bitcoin’s new hashrate record could be the Ethereum Merge upgrade to Proof of Stake, which removed miners.
They used graphics cards to mine Ethereum, so they couldn’t easily migrate to bitcoin mining with ASICS equipment, but they may have migrated to bitcoin mining equipment to continue mining operations.
It could also be that with the price of bitcoin reaching stability since June, just as some speculate by buying bitcoin outright, there could be new investors speculating by purchasing mining equipment.
The rise in hashrate can have a bit of all of this: increase in new mining companies, both large and small; new mining demand from the GPU migration and room for more speculation after price stability.
This all came after bitcoin’s hashrate fell to 189 EH/s from the usual 220 in July, with the recovery since and now on the rise.
If at least some of this new hash is focused on mining for the purpose of holding bitcoin, and not just mining and selling, it probably wouldn’t be much different from buying bitcoin directly.
Except it may not be reflected in the price as quickly as a mining operation obviously takes longer than a direct bitcoin purchase.
The hashrate can therefore be an important indicator, but in light of incomplete information, as we do not know who these miners are, we may have to wait and see what effect this spike, if any, has on the price.
This article is distributed by trustnodes.com
Source: Live Coins
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
