Ethereum's Recent Decline in Hashrate 'Not Surprising': Cyber Threat Expert Explains

Anthony Sassano, a “cyber threat detection expert” and active contributor to the Ethereum project, observed recently that the ETH price “double bottomed” at around $80 on December 15th 2018.

Sassano, an experienced cybersecurity professional and co-founder of EthHub, a Melbourne, Australia-based organization that focuses on “open source, community-driven Ethereum research,” revealed via Twitter some important Ethereum metrics since mid-December 2018:

Key Ethereum Metrics Since Mid-December 2018

As pointed out by Sassano in his detailed Twitter thread, the number of active Ethereum addresses “actually bottomed at ~177k on Feb 16th 2019.” Moreover, the 24-hour transaction count on the Ethereum blockchain “bottomed at 438k on Feb 16th 2019 as well,” Sassano revealed.

The online security researcher further noted: “Curiously, Feb 16th-23rd 2019 is when the price of ETH increased from $120-$160.”

Ethereum’s Network Usage Has Remained At Or Above 60% “Since Nov 2017”

According to Sassano’s assessment, Ethereum’s “network usage tends to fluctuate wildly due to a variety of conditions and depends on what kind of activity is happening on the network on that day (ICO, big price movements, airdrop etc).” Given that multiple different factors may determine the level of activity on Ethereum’s blockchain, Sassano mentioned that the smart contract platform’s “network usage has not dipped below 60% since Nov 2017.”

Why Ethereum’s Recent Hashrate Decline Is “Not Surprising”

Sassano continued: “The overall hashrate decline is not surprising given the fact that rewards were reduced by ~31% as part of the latest issuance reduction. Plus, investing in mining on Ethereum is a short-term game given the switch to proof-of-stake (PoS) and eventual sunsetting of the Eth1.0 chain.”

Commenting on the Ethereum community’s decision to experiment with programmatic proof-of-work (ProgPoW), Sassano remarked:

I'm also curious to see what happens to the hashrate if ProgPoW is merged into the next network upgrade (Istanbul). I'm personally not expecting a huge drop off & we may see it level out due to GPU miners coming back online. This also depends on the price of ETH, of course.