This article from the bitcoinist, the original author: Allen Scott
The daily planet Odaily translator | Moni
When you see the photo above, will have the feeling?
In the photo above, is from 2017 4 to 2019 years 3 months of nearly two years of bitcoin hash rate chart. From what did you find? Yes, now bitcoin hash computation ability — that is the rate for protection of the whole network (is), has reached the highest level since the month of 11 2018 at the beginning of the year.
If further analysis, you will find that, compared to the December 2017 bitcoin price reached $20000 the highest point in history period, now the network hash rate was more than four times at the time!
In fact, bitcoin mine from our past is just a short four months time, does that mean that the market began to recover?
What happened last November, I believe many people will not forget, when the price of bitcoin in just ten days fell from $6500 to about $3600, almost off currency price, this wave of market once led to the whole network 1/4 is the machine shut down, many miners began to sell low-priced machine. At that time, the U.S. financial industry experts, Professor of finance at the University of Santa Clara (Atulya Sarin) – sarin auto still “market observation” (MarketWatch) published a column, the concept was first introduced “mining death spiral”, and claimed that bitcoin will become not worth a hair.
The so-called “mining death spiral” refers to when the price fell, causing the entire encrypted currency up bitcoin price is lower than the total cost of mining, the lowest efficiency miners had to close their mining equipment to avoid operating loss. But as more and more miners were “from the” market, hash of the entire network rate will also decline, once is declining, lose confidence in the market, will lead to a large number of investors in the futures market short bitcoin, and then increased rapidly falling prices, forming a vicious spiral similar to the spiral of death,
But in fact, bitcoin seems to start by adjusting the difficulty to deal with the negative impact of each ore miners were forced to shut down will increase the profitability of the remaining miners. That is to say, there are still many miners will remain in the bitcoin network, confirm the transaction data mining — don’t lie, according to Bitnodes data show that since February 2018, the number of transactions on the network every day bitcoin miners confirm are increasing, the number of nodes is increased by 98% in the past two years.
The miner’s optimism is back!
According to Blockchain.com data show that the disclosure of bitcoin hash rate in March 19th rose to more than 52 quintillion hashes/s (Note: Quintillion is three, /s is 1 EH million per 100000000000000000 (a quintillion) hash). There is no doubt that the hash rate is an important index to evaluate the performance of bitcoin miners, in simple terms, the hash rate is high, the network is safe, because hackers to attack the network need to expend resources and cost will be more.
On the other hand, as shown above, bitcoin mining difficulty has been maintained in the past month was relatively stable, which means that the miners will be more likely to keep its deployment of mining in the network, will therefore attract more new miners admission, the result is that the stimulus rate rose Hashi.
Of course, the recent bitcoin prices is another important factor. At the beginning of February this year, bitcoin network Hashi layer reached 50000000 TH / s peak, after they have been showing a downward trend. With the price gradually restored, this decline will be broken, even is more and more close to the August 2018 record of 62000000 TH / s highest rate hash record.
That is, the hash rate is an important index to evaluate the emotional network encryption currency miners, because only the miners’ confidence in the future of the network, have the intention to invest in mining operations work, will make the network get more protection, more secure.
Jameson Lopp is a crypto currency managed services company, Casa’s chief technology officer, he believes that the miners had a premonition that bitcoin future prices will rise. At present, the price of bitcoin has experienced four consecutive rise, many miners were ready to start, to prepare for the return. Jameson Lopp further explained:
“Some people think the price will follow the hash value, but in fact is not the case, the hash rate is follow the price trend. In fact, is not always able to track the spot price, it is more a reflection of a speculative price in the future, to know the miners is essentially market speculators.”
Restore the bitcoin network hash rate, also shows that at the end of last year because prices triggered and baseless “mining death spiral” worries now could actually be put down. Now, more and more miners on the line, at the same time push network hash rate, also shows that they have full confidence in the current bitcoin spot price earnings and future market expectations.
The bear is a very difficult period for the miners, but with the gradual recovery of the market, the long suffering seems to usher in the dawn. As a most important part of the global miners, Chinese bitcoin miners are planning the effective use of the upcoming summer rainy season, get more competitive cost.
However, the star Jun (WeChat: o-daily) this still have to remind you, although the price can be cheaper, but the overall market sentiment is good, but the biggest risk for the miners is still a potential decline in prices. According to industry sources, if bitcoin prices fell to $3000, then the miners “miserable world” may be coming true, even if can short bitcoin futures contracts to hedge against potential losses, but it does not have adequate counterparties to do long positions, the loss will not be hedged for miners.
But on the current market environment, how to give up the miners to return this opportunity?