According to certain surveys and studies, it is found that there is a sudden breakout in bitcoin prices for the past six weeks. The uproaring bitcoin hash rate also reached a new all-time high even in the midst of this pandemic. What are the external and internal factors that are affecting the hash rate and bitcoin prices? Ler’s check out this article till the end to know more about those factors.
Sudden Breakout In Bitcoin Price: Total Bitcoin Computing Power Touched A Seven-day Average
Firstly, what could the hash rate mean for BTC price? Hash rate is the number of calculations performed by given hardware or network every second. For miners, a higher hash rate is higher the chances of solving the mathematical problem that seals off the block and collecting their reward. The network’s hash rate often indicated that energy consumption has increased as well.
Despite this pandemic outbreak, several data firms have been flashing bullish for the past six weeks amid positive on-chain activity. Even though in this uncertainty, 2020 is indeed a key year for cryptocurrency, especially Bitcoin. The bitcoin halving has seen block rewards halved to 6.25 BTC, which may put increased pressure on prices and catapult BTC back to its historic highs – or beyond.
Factors affecting the hash rate of bitcoin
Bitcoin hash rate is the measuring unit of the processing power of the bitcoin network. The bitcoin network will make sophisticated mathematical operations for security purposes. When the network reached a hash rate of 10, it means that the network could make 10 trillion calculations per second. Now let’s check the factors affecting the bitcoin hash rate.
- The most important factor that affects the rate of bitcoin is the supply of bitcoin and market demand for it.
- The cost and rate of producing a bitcoin through the mining process
- The next important factor is the rewards issued to bitcoin miners for verifying transactions to the blockchain
- The rate and price of other competing cryptocurrencies will affect the hash rate and price of bitcoin
- The exchanges and platforms that trade the respective cryptocurrency
- The regulations governing its sale and its internal governance
- The popularity of the cryptocurrency will drive its price up
- Bitcoin reward halving is a contributor to the fluctuating price of the cryptocurrency
The hash rate can also be defined as the speed at which a given mining machine operates. If any time bitcoin network’s difficulty increases, the hash rate increases consequently, the miner earns some bitcoins and the transaction fees too. If the miner needs to compute more guesses per second, then the difficulty of mining by the miner in that network also increases. We hope that you all understood why the bitcoin prices and its hash rate is increasing even in the midst of this pandemic. Feel free to comment on your suggestions and opinions.