On-chain data shows that Bitcoin Hashrate has risen to a record value as the coin’s price continues to explore all-time highs (ATHs).
The average 7-day Bitcoin mining hash rate has been rising recently
“Hashrate” refers to a metric that tracks the total computing power that Bitcoin miners as a whole are currently connected to the network. Its value is measured in units of hashes per second (H/s), or the larger and more practical units of hashes per second (TH/s).
Miners use their computing power to solve some mathematical puzzle, and the reward is the chance to add the next block to the chain. However, at no point in time does a collective networked computing power work side by side.
Instead, miners compete against each other using their individual Hashrate to be the first to solve these puzzles and receive compensation. Despite this fact, the “overall” hash rate is still a useful indicator, as it provides a look at the position of these validators as a whole.
When the value of this metric increases, it means that miners are connecting additional power to the network. This trend indicates that this group finds Bitcoin mining to be a profitable venture.
On the other hand, a decrease in the index indicates that some miners have decided to leave the blockchain, perhaps because they are no longer generating a positive return.
Now, here’s a chart showing the trend in the average 7-day Bitcoin hash rate over the past year:
The 7-day average value of the metric appears to have been going up in recent days | Source: Blockchain.com
As shown in the chart above, Bitcoin’s 7-day average hash rate has been rising rapidly recently, meaning miners have been expanding their facilities.
Around the beginning of the month, the metric hit a new record of 755 Tbps, but although the cryptocurrency continued to rise to new highs in the following weeks, the metric recorded a decline instead.
Bitcoin miners generate their revenue from two sources, transaction fees and block support, but the latter usually contributes to the vast majority of their income, so the former can be ignored when trying to measure miners’ profitability.
Block support remains fixed in BTC value (except for the halving, which are events that occur approximately every four years where it is permanently halved) and is awarded for a roughly constant rate of time. As such, the only way a miner’s revenue can change is when the price of Bitcoin itself changes.
Bullish periods naturally increase the profitability of on-chain validators, so they tend to invest more in their farms. That’s why the trend we saw earlier in the month was surprising.
Miners may not have been too confident about the rally at the time, but with the recent price rally near the $100,000 level, Hashrate appears to be back on track, suggesting that this group has bought into the rally.
Following the recent increase, Bitcoin’s 7-day average hash rate hit a new record high of over 768 TH/s.
Bitcoin price
At the time of writing, Bitcoin’s price is around $98,000, up more than 9% over the past week.
Looks like the price of the coin has been marching up over the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Blockchain.com, chart from TradingView.com