It is being reported by crypto experts and journalists that the hashrate of various coin networks is climbing. To understand the implications of this sudden rise in hashrates of major coins such as Bitcoin and Ethereum, one must first understand what exactly hashrate is.
What is Hashrate?
Hashrate simply refers to the rate of computational power. In the context of crypto, it is the rate of mining. An increase in the hashrate of a particular blockchain network indicates that more of its coins are being mined. Thus, if Bitcoin’s hashrate jumps up suddenly, it means that more people or machines have started mining Bitcoin.
One might think that it’s good news for a particular coin for its blockchain network’s hashrate to keep increasing. That may be partly true. However, the more the hashrate, the more difficulties a blockchain network may face. It’s obvious that increasing mining will put a load on the network and it will hamper transactions and trading. Moreover, in the case of Bitcoin, it is even more alarming. This is because Bitcoin isn’t structurally strong enough to handle such spikes, as was pointed out by the founder of Ethereum in the recent past.
Currently, Bitcoin, Ethereum, and a number of other cryptocurrency networks are seeing an increase in hashrates. However, there are certain networks like Dash, ETC, and LTC that have lower hashrates. Maybe, people are beginning to mine more crypto in order to prevent the alleged ‘bubble’ from bursting. Yet, the exact cause behind this spike in mining is unknown.