Bitcoin (BTC) mining difficulty level decreased. This decrease caused a sudden increase in hash rate. Now the hash rate is very close to the all-time highs, or ATH!
Bitcoin miners are an important component of the BTC ecosystem. In response to their transaction power, miners receive compensation in the form of Bitcoin for their services. One of the most anticipated events in the cryptocurrency field this year, the Bitcoin halfway took place on 11 May. Miners’ block rewards have been reduced from 12.5 BTC to 6.25 BTC.
Bitcoin (BTC) Hashrate Sees Capitulation After Splitting
The ascension rumors about the halfway event actually stemmed from its historical significance. The last half of July 2016 caused about 3000% leap in BTC / USD.
However, halfway has a noticeable effect on miners. Bitcoin mining consumes a lot of electricity. Miners will continue to mining as long as it is profitable. However, with the fall in BTC / USD prices and halving rewards, some miners are no longer able to profit.
Therefore, some miners stopped their systems and exited the network. When a large number of miners leave the network, the hash rate on the network is greatly reduced. Hash rate also shows network security.
Hash Rate Suddenly Rises to ATH Levels
If the miners continue to leave, the security of the Bitcoin Blockchain network can be compromised. Therefore, the mining difficulty level adjusts itself to reduce electricity consumption. Recently, the difficulty level has dropped drastically.
Adjusted difficulty level aims to keep Bitcoin mining profitable. This automatic tuning is also an important feature that ensures the security of the system remains biased.
Hash rates have now risen to the all-time highs. It can indirectly cause BTC / USD to rise in the short term.
But it should not be confused as a bull signal! The difficulty level will be reset to the previous level within two weeks.