Hash rate is a measure of the total computational power of the cryptocurrency network (how many hashes are created per second). An increase or decrease in hash rate signals a rise or fall in miner activity.
More about this: some cryptocurrencies (including $BTC ) come to market through mining, which means the extraction of new blocks by miners and receiving rewards in the form of new coins.
The mining process consists of complex calculations using a powerful computer. Moreover, it is a competition; the greater the power (number of hashes), the larger the reward you will receive.
At the beginning, Bitcoin mining was available to anyone with a home PC. But with the rise in its popularity, the costs of mining have been continuously increasing. Currently, Bitcoin mining requires enormous computational power, significant costs for equipment, and electricity. Nowadays, mining is mainly carried out by large companies that can afford such expenses. The costs of mining 1 BTC range from $11,000 to $25,000 (depending on the electricity rate).
At the same time, the reward for mining Bitcoin is continuously decreasing. Halving (reduction of the reward) occurs approximately every 4 years and reduces the reward and mining speed by 50%. For example, in 2023, the reward was 6.25 BTC, and after the halving in 2014, it was 3.125 BTC.
It might seem that with such conditions, Bitcoin mining would no longer be interesting. But that is not the case. The constant increase in price still makes Bitcoin mining a profitable business. If in 2019, 1 BTC was worth $20,000, now the price fluctuates around $100,000.
On January 3, 2015, Bitcoin's hash rate broke its historical record again, and its value nearly doubled over the year!!
This indicates that miner activity in the network is growing, having doubled over the year. This occurs just as the halving is set for 2024.
Mining companies continue to invest and accumulate assets in the form of Bitcoin.
Does this mean belief in further price growth? I think so, do you agree?
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