The computing power could soon equal and exceed the numbers before the ban on cryptocurrency mining in China. Even though the price of Bitcoin is facing a dip, the hash rate continues an upward trend.
The hash rate of Bitcoin is about to return to its levels before the Chinese repression against cryptocurrency mining, according to Glassnode.
The graphs of the blockchain analysis company indicate that the hash rate is only 4 percent away from reaching the levels of early May. At that time, it reached an all-time high (ATH) of 197.8 exahashes per second (EH/s).
The hash rate of the pioneering cryptocurrency is recently above 188.3 EH/s, showing a significant recovery of the industry. That points to estimates that match and exceed the previous level. That seems imminent and could indicate a growth in the number of miners connected to the network.
Relationship between the Hash Rate and the Price of BTC
The hash rate usually follows the path of the price of the pioneering cryptocurrency. After the Chinese government banned the industry, miners disconnected their farms and migrated, consuming their computing power and leading the price of BTC to drop.
The hash rate of October returned to the levels of May and pointed to a new all-time high. On the 20th of that month, the value of Bitcoin reached an ATH of nearly USD 67,000.
The current Glassnode chart shows BTC is facing a dip, but the rebound of the hash rate brought it closer to its May highs. Nobody knows exactly whether the price may rise, but a future upward trend could occur.
Bitcoin mining is quite profitable even with low prices, which also hints at the growth in the hash rate. Miners connect when work makes money, so an increasing computing power suggests more miners operating and monetizing.
The Attack by the Chinese Government against Cryptocurrency Mining
In mid-May, the Chinese government extended its attack against Bitcoin and other cryptocurrencies, leading to a ban on mining.
As a result, the hash rate plummeted to all-time lows, and the capacity to mine cryptocurrencies was 61 EH/s.
The government alleged excessive use of energy to sustain the activity, especially in regions with scarce electricity. They also said that cryptocurrency mining harms the environment worldwide.
Since then, thousands of cryptocurrency mining machines and people have moved to nearby borders like Kazakhstan. Meanwhile, others went to more distant lands like the United States and Canada.
After welcoming miners and giving them spaces and straightforward rules to expand the industry, the United States quickly replaced China regarding hash rate.
While the United States currently has 30% of the global hash rate, Kazakhstan has 8%. Russia and Canada have also opened their doors to cryptocurrency mining.
Bitcoin mining, an activity practically located in one place, has risen by 93% from the lows seen in June. Besides, it has become global by moving to other latitudes, an essential operation for the pioneering cryptocurrency to stay.
The relevance of Bitcoin and other cryptocurrencies is increasingly evident, which the governments of various countries have not overlooked. In that regard, they have accepted the miners who migrated from China, offering them the opportunity to expand their activity.
By Alexander Salazar
