What is the hash rate?
The hash rate is a measure of the computing power in the Bitcoin ecosystem. To ensure security, the miners provide their computing power to enable the BTC network to perform complex computing operations. For this purpose, the hash function must fulfill two main tasks. On the one hand, all hash values should occur approximately equally when trying out different inputs. On the other hand, even the smallest changes must be detected and lead to a new hash value.
The Difficulty – A double-edged sword
For investors, a high degree of difficulty (difficulty in mining) generally means more security. The more computing power flows into the ecosystem, the more stable it is. However, as the degree of difficulty increases, it becomes more and more difficult for miners to cover their invested computing power, let alone achieve greater profits. The current difficulty is an astronomical value of 15,958,652,328,578, and the situation could change abruptly after the third Halving Event.
Bitcoin Halving and the consequences
The Bitcoin Halving is considered one of the biggest highlights in the crypto year 2020: In about 8 days the Mining Rewards are halved from 12.5 BTC to 6.25 BTC per mined block. As a result, the inflation rate drops to an approximate value of about 1.8% (currently the inflation rate is 3.64%). In practice, the miners can only mine about 900 BTC’s per day from this point on. Many experts believe that the falling supply, with demand remaining the same or increasing, could have a positive effect on the price. A similar situation was observed after the last Bitcoin Halving Event. However, one should also expect that many miners, after the coming Halving, will move to another crypto currency or give up mining completely. The enormous competition means an imminent end for many miners. Already now almost 66% of the total hash rate comes from China. The Land of the Rising Sun dominates the market at will.
At the time of this article, the BTC price is at a value of USD 8878. This corresponds to a daily gain of 0.12%. The No.1 crypto currency is therefore still in a sideways movement. However, this could soon turn out to be a short-term snapshot. The high volatility and the pending halving form an optimal starting point for price breakouts. The 24-hour volume of just under USD 45 billion illustrates the high level of investor interest. It is the famous calm before the storm!