Despite the market volatility, computing power continues to grow. The increase in the difficulty and costs of Bitcoin mining has not prevented its expansion.
People normally consider the price of Bitcoin (BTC) to be a determining factor when talking about the expansion of the cryptocurrency. Its price recently doubled the all-time high of around USD 20,000 that it had recorded in 2017. However, all the computing power (hash rate) of the network has grown even more in the last three years.
Even though many elements have intervened in the price variations, the general trend has been upward, as has the hash rate. In recent days, the price of Bitcoin was around USD 41,940 per unit, according to data fromCoinGecko.
That figure captures the attention of the media, traders, newcomers to the world of cryptocurrencies, and the general public. However, the growth of the hash rate by almost 100% demonstrates the interest in making the network more secure and reliable, regardless of the price of BTC.
Arrival of New Miners to the Network
The hash rate of the Bitcoin network went from 13.4 EH/s, in mid-December 2017, to 155.4 EH/s, today, according to data from blockchain.com. The arrival of new miners and equipment with greater processing capacity made that happen.
The increasing difficulty and costs of mining Bitcoin have not prevented more miners from reaching this public and open network. The difficulty is currently at the top with 20.6 T as a relative measure, so the mining of the blocks occurs about every 10 minutes.
Furthermore, this increase in the hash rate has an impact on the companies that manufacture ASIC equipment for Bitcoin mining. For example, companies like Bitmain, Canaan, and Innosilicon continuously announce new miners that adjust to the difficulty of the network. Something similar happens with the manufacturers of video cards or GPU to mine.
Incentives for Bitcoin Miners
One reason to enter Bitcoin mining could be to keep the network secure and reliable. In recent years, miners have entered due to the incentives derived from fees and rewards for blocks mined.
Last December, Bitcoin miners recorded revenues of nearly USD 3 million per day from fees alone. In January 2020, the incentives for validating operations were around USD 70,000 per day.
A piece of evidence of the good state of the network is the increase in the hash rate since it shows how protected it is. That allows users to validate transactions and mine new blocks, thus decentralizing data processing.
Furthermore, it would be difficult to attack the network as this would represent a high cost. That amount of hash rate implies that it is impossible to arbitrarily modify or violate the rules of the protocol. In other words, no one can corrupt or manipulate the network at will.
Apart from delays to confirm transactions, the network’s security is essential to move funds in this system. Other projects seek faster operations while Bitcoin focuses on a higher reliability weighting.
By Alexander Salazar
