Recent on-chain data indicates that the 7-day average hash rate for Bitcoin mining has surged, reaching a new all-time high (ATH).
Bitcoin Mining Hashrate Sees Significant Increase Recently
Data from Blockchain.com reveals that the 7-day average of BTC mining hashrate has been on the rise lately. The term “mining hashrate” refers to a measurement that tracks the total computing power that Bitcoin miners have linked to the blockchain.
The BTC network operates on a consensus mechanism based on proof-of-work (PoW), where miners utilize this computing power to solve complex mathematical puzzles.
However, this collective power does not function in unison; instead, miners operate their own mining farms to compete with one another in order to be the first to add the next block to the chain, rather than working together towards a common goal.
This structure is intentional, as centralizing power among a few entities would undermine Bitcoin’s claim to being a decentralized network. So, if there isn’t a unified BTC power, what is the significance of the total hashrate? The answer lies in the sentiment expressed by miners collectively.
An increase in this metric indicates that miners find the BTC blockchain to be an appealing endeavor. Conversely, a decline suggests that some validators have deemed the network unprofitable, prompting them to disconnect their machines.
Now, take a look at the chart depicting the trend of the 7-day average Bitcoin mining hashrate over the last year:
The 7-day average value of the metric appears to have recently spiked | Source: Blockchain.com
The chart above demonstrates that the 7-day average Bitcoin mining hashrate has experienced rapid growth over the past few days, surpassing the ATH previously established this month. This recent uptick in the metric may be linked to the recent bullish price movement of the cryptocurrency.
Miners primarily earn income through the block subsidy, which is a fixed BTC reward given for adding blocks to the network. This subsidy is distributed at a relatively constant rate, making the primary variable affecting miner revenue the USD value of BTC.
The earlier increase in mining hashrate followed a price rally. Miners had anticipated this upward trend to continue, but when it became apparent that this was not the case, they scaled back on their upgrades.
A similar trend was noticed last month. It remains to be seen whether this latest increase in Bitcoin mining hashrate will follow the same pattern or if this price rally will incentivize miners to expand.
BTC Price
The Bitcoin price rally experienced a setback over the past few days, retracting to the $67,100 level.
The price of the coin appears to have been trending upward recently | Source: BTCUSDT on TradingView
Featured image from Dall-E, Blockchain.com, chart from TradingView.com
