- The Bitcoin network hash rate has fell 25% from the all-time high.
- Hash rate has decreased significantly since the Bitcoin halving event.
The Bitcoin network is a proof-of-work network meaning individual miners contribute their hardware to help validate and process transactions on the Bitcoin network.
As covered by The Crypto Associate, the recent Bitcoin halving event reduced the Bitcoin block reward from 12.5 Bitcoin to 6.25 Bitcoin. As a result, many miners have dropped from the Bitcoin network resulting in a massive hash rate drop.
Bitcoin network hash rate peaked on May 7 2020, at 122 EH/s, while dropping to 90.6 EH/s a few weeks later. The 32 EH/s drop is equivalent to 320,000 Bitmain S19 Pro ASIC miners leaving the network. Despite the hash rate drop, the Bitcoin network still consumes an imaginable magnitude of electricity.
Following the massive hash rate drop Bitcoin’s difficulty decreased by 6%. However, the average Bitcoin block time still remains well above eleven minutes, a minute over the target ten minute block time.
Network Fees Rise
Cryptocurrency transaction fees have been on the rise with Bitcoin fees surpassing $5 for a network transaction. An increase in transaction fees represents increasing network congestion. In 2017, Bitcoin transaction fees surpassed $35. While fees have since cooled down, they are back on the rise.
The rapid hash rate drop has resulted in the Bitcoin block time surpassing the intended 10-minute average. As discussed by Johnson Xu, Chief Analyst at TokenInsight, Bitcoin transaction fees may have risen due to the increase in block time.
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