The Bitcoin hash rate – the number of hashes per second the network is performing – has stabilized undergoing its biggest downward difficulty adjustment in seven years amid lower BTC price.
Bitcoin Network Heals Its Wounds
On the back of the Bitcoin price hitting 15-month lows and dropping 50 percent in the past month alone, miners have faced operational losses or stopped mining altogether.
Bitcoin’s hash rate thus began falling over recent weeks, reversing an upward trend which had persisted throughout previous bull and bear cycles.
The downward difficulty adjustment December 4 helped to offset the lower price of bitcoin for miners.
Now, data from monitoring resource and wallet provider Blockchain confirms that hash rate has naturally begun climbing again following the event.
The data was reproduced on social media by Frank T. Young, chief product officer of fintech services provider Global Payments Tuesday.
Bitcoin Doesn’t ‘Take The Punch Bowl Away’
Bitcoin’s ‘self-correction,’ he argued, serves to illustrate not only the cryptocurrency’s sustainability as an ecosystem, but puts it in another league from the manual processes still used in fiat money systems – including the US Federal Reserve.
On Wednesday, the Fed was due to make a significant policy decision on interest rates.
“(The Bitcoin hash rate) has stabilized via difficulty adjustment,” Young commented.
“When you watch news coming from Wednesday’s Fed meeting ask yourself, ‘which approach is more sustainable?’ The ‘politically driven opinion of appointed Fed officials’ or ‘math?’”
Catalina Marketing chief product officer Ben Sprecher responded in kind, claiming it was “pretty amazing to have a self-correcting, self-throttling mechanism built-in” in Bitcoin.
The whole voodoo of ‘take away the punch bowl as the party gets started’ + ‘add *just* enough stimulus when ‘needed’’ gets replaced by the math of internal equilibrium incentive mechanics.
Saifedean Ammous, to whom both commentators appealed in the discussion, appeared to endorse the Bitcoin – Fed contrast.
That’s a great way of putting it!
— Saifedean Ammous (@saifedean) December 19, 2018
Despite prices still hovering near annual lows, others in the industry continue to reiterate their faith in Bitcoin, among whom was Galaxy Digital CEO Mike Novogratz this week.
What do you think about Bitcoin’s hash rate function? Let us know in the comments below!
Images courtesy of Shutterstock, Blockchain.info