Tech media is all a-twitter (in the traditional sense and the new one) about a sudden gargantuan drop in Bitcoin hash rate down from about 98 million terahash per second, to about half of that at 57.7 million Thps.
Through the summer, experts were looking at a series of new milestones as Bitcoin hash rate crested various Terahash per second benchmarks.
As we explained in reporting that, the hash rate is a measure of how many hash algorithms are triggered in a particular time sequence to generate Bitcoin mining activity.
We know that there are many new machines coming online, including all of those ASICs that are custom-built for mining.
We also know that there is quite a bit of consolidation around various Chinese mining pools, which account for the lion’s share of this mining activity.
Now, with the hash rate crashing nearly halfway and then reversing, it’s worth thinking about the landscape of Bitcoin mining and factoring that into the markets.
A drop like that in the BTC hash rate is not the same as a major drop in value, where investors are selling off equities or assets, and the price is therefore going down quickly.
In order to get that kind of decrease in hash rate, there has to be a “great unplugging” of many machines at once – picture the sudden silence of thousands of high-powered mining rigs that were previously rattling along in unison like the world’s biggest air conditioner.
With the hash rate back up, the point seems relatively moot to many investors who just want to see how current events impact Bitcoin value.
However, it’s worth thinking about what hash rate crashes mean, and what they represent in Bitcoin trading environments. Ride out the volatility!
