Panic! Yesterday, many crypton news websites reported that the bitcoin hash rate has dropped by as much as thirty or forty percent. Okay ahead, we also wrote about it briefly. But is that correct? The short answer is: no, you don’t have to.
Data from blockchain.com shows a “flash crash” of the bitcoin hash rate
About the bitcoin hash rate
The hash rate indicates how many calculations per second all computers make simultaneously on the bitcoin network. This number gives you an indication of how strong and secure the network is that is maintained by so-called miners. The higher the hash rate, the harder it is to hack the bitcoin blockchain.
This hash rate has been on the rise since December 2018. More and more miners are joining the bitcoin network. Some time ago, even the highest hash rate ever was recorded. But yesterday it was suddenly news that the hash rate had fallen by forty percent.
The wildest theories went round. Has the Chinese government taken measures to stop miners? Has a large well-known mining organization stopped? Did miners already know that a fall in prices was expected? There was plenty of speculation again, but the reason was unknown.
The hash rate is an estimate
It is important to know that the figures never provide an exact representation of the real hash rate on the network. The graphs that you see are often an estimate of the total computing power on the network. Christopher Bendiksen, lead investigator at CoinShares, explains this on Twitter from:
“The bitcoin hash rate is not fixed. This figure is estimated based on time intervals between transaction blocks. These times are based on a Poisson distribution (a kind of probability calculation). When blocks are found slowly, the estimate of the hash rate is considerably reduced. “
Another Twitterer shows that there had indeed been slow blocks:
I log the estimated network hash rate from my node in 5 minute intervals and don’t see anything out of the ordinary.
Lowest estimated was ~ 66 EH / s, but it appears as though we just had a few slow blocks (ex: 596213, 596250, 596267, etc) that snowballed the estimate downward. pic.twitter.com/ae4EHExBNO
– Storms (@austorms) September 24, 2019
Average graph gives a better picture
That the hash rate is an estimate is also clearly reflected in the graph at the top of this article. The hash rate bounces up and down. You can therefore better look at the graph that represents the seven-day average. This graph is less sensitive to accidental fluctuations:
Seven day average of the hash rate, from blockchain.com
You can see that the hash rate has fallen slightly since the peak, but much less than forty percent. In short, there is nothing wrong!
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