Bitcoin's hash rate has fallen 25% since the weekend – a worrying sign for the security of the largest digital coin's network ahead of the much-anticipated event “Halving” event.
Data from MiningPoolStats shows that the total real-time hash rate of all known mining pools fell from 570 exahashes per second (EH/s) on Sunday to just 425 EH/s on Tuesday. It is currently at 550 EH/s. Exahashes per second refer to the speed at which computers mining Bitcoin guess a number – one exahash is equal to one trillion hashes.
In order for Bitcoin miners to process transactions, they must make a series of guesses about a complex mathematical problem. A higher hash rate means miners make more guesses – and therefore work harder to secure the network.
The reason for the drop in hash rate? Miners in Texas cut power during a cold snap to shore up the local power grid. The Texas Blockchain Council written down The company addressed the issue on Monday and said it was “ready to adjust operations to maintain network stability.”
Texas is a major Bitcoin mining hub due to the cheap electricity in the state. Bitcoin miners need as much energy as possible to run the blockchain's network.
Hash rate is an important security metric that refers to the amount of computing power miners use per second. As more computing power is deployed, it becomes more difficult for attackers to take control of more than half of the Bitcoin network.
A falling hash rate is bad for the Bitcoin network as a whole – especially before the halving.
The upcoming Bitcoin halving will halve the amount of Bitcoin allocated to miners. It is expected to take place in April and will be the fourth such event since the cryptocurrency was launched in 2008.
Instead of 6.25 Bitcoins, miners who mint new digital coins and keep the network running will be rewarded with 3,125 BTC for each block processed. The reward cut limits the amount of new Bitcoins that are minted and enter the market – it is intended to keep Bitcoin's inflation rate under control, even though the digital currency's supply is pegged at 21 million.
Some expect market analysts It will drive up the price of Bitcoin as the asset's available supply becomes more scarce than it already is. Historically, a Bitcoin bull run preceded a halving. However, analysts disagree about the impact of a halving on the market because the event is known well in advance and built into Bitcoin's code.
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