October 10, 2022
The leading digital asset Bitcoin saw its hash rate surge 10.8% to a new all-time high in October.
Data from Blockchain.com shows that Bitcoin’s daily hash rate hit 258.39 terahashes per second on October 8. The increase in hash rate is indicative of a higher amount of computing power towards mining Bitcoin.
The rise in hash rate was likely induced by a number of factors, such as lower GPU prices and the subsequent reduction in the price of mining rigs that allowed Bitcoin miners to upgrade their equipment.The Ethereum Merge, which marked the network’s transition from Proof-of-Work to Proof-of-Stake, is another event that may have caused the spike in Bitcoin’s hash rate. Until recently, Ethereum was the second largest Proof-of-Work blockchain and accounted for a significant amount of hash rate from GPU mining firms. With Ethereum mining made redundant, miners may have pivoted to mining Bitcoin as an alternative source of revenue.
While Bitcoin’s higher hash rate inarguably makes the blockchain more secure, it does not come without consequences for some – particularly smaller players with a higher cost of operations.
A higher hash rate corresponds to a larger difficulty adjustment, which is the mechanism in place to ensure the average block time stays around 10 minutes. According to mining statistics from Braiins Insights, the network’s next difficulty adjustment will be an increase of 18.9%.
“Tomorrow, bitcoin miners will see a ~14% increase in difficulty, the largest jump since hashrate rebounded from the crash caused by China’s ban in May 2021.Fledgling miners are getting absolutely crushed,” noted mining analyst Zack Voell in a tweet.