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Is the hash rate and mining difficulty of bitcoin blockchain network really related to the price of bitcoin?,Relationship between blockchain and mining

Time : 14/10/2021 Author : jox40a Click : + -
        Hash rate has always been regarded as a good sign of blockchain network health. In the short term, it has no direct relationship with price, but it will indeed improve network security and performance in a long time, which is certainly optimistic. Since the beginning of 2019, the hash rate of bitcoin has increased by almost 180%, from about 40eh/s per second to 117eh/s a week ago. In contrast, bitcoin has two forks &mdash& mdash; Bitcoincash and bitcoinsv performed mediocrely in the same period. At the same time, it is expected that the mining difficulty of bitcoin blocks will also increase by about 8% this week.
 
        Longhash has been studying these trends to see if there is a correlation between these indicators and bitcoin prices. Since January 1st, 2019, the mining difficulty of bitcoin has increased by 133%, the hash rate has increased by 180%, and the price has increased by about 125% in the same period, which may indicate that there is a connection between the two. In the second half of 2018, as bitcoin miners shut down and surrendered, the bitcoin price, hash rate and mining difficulty plummeted together. The dark cloud about the death of bitcoin mining appeared on the Internet, but it was soon exposed, and the index began to recover in early 2019. The report continued to point out that the price of bitcoin peaked in June 2019, reaching about $13000, but then began to fall, resulting in a 52% decline in the price of bitcoin when it fell from a high to a low on December 18, 2019.
 
        However, in the six-month downward trend, the hash rate continues to climb hard. This is because the investment period of bitcoin mining industry is very long, the initial hardware cost is very high, and the power and site leasing contracts are also long-term. Therefore, the hash rate follows the long-term trend rather than the short-term price fluctuation of bitcoin. The next question is whether halving the bitcoin network block in less than four months will affect the hash rate of BTC. Theoretically, the lower mining profitability caused by reducing the block reward by 50% may put pressure on small ore pools, resulting in the decline of the overall hash rate of the network. In the past two block awards halved, the price of bitcoin soared, which led to more mining investment and greater hashing capacity.
 
        The result of this time will largely depend on the impact of halving the bitcoin price of the block reward. Industry observers disagree on two points of view: one is that whether the current bitcoin price has been halved has been taken into account, and the other is that this bull market will be followed by a larger bull market, as in previous years. Economic models, such as inventory flow model and energy value model, undoubtedly imply that the latter may be correct, but only time can prove this.
 
        
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