Bitcoin's Hashrate Mysteriously Drops From 98 EH/s to 57.7 EH/s in a Day

Francisco Memoria

The Bitcoin network’s hashrate has mysteriously crashed over 40% on Monday, September 23, after it dipped from around 98 EH/s to around 57.7 EH/s before recovering.

The crash occurred after the hashrate hit a new all-time high above 100 EH/s on September 18. It isn’t clear what’s behind it, as competing networks using the same hashing algorithm – including the Bitcoin Satoshi’s Vision and Bitcoin Cash hard forks – didn’t see a significant hashrate increase, which means large miners didn’t choose to mine another cryptocurrency.

Bitcoin's hashrate dropSource: Coin.Dance

A cryptocurrency’s hashrate helps secure its network, as miners use their computing power to make calculations and find new blocks. Through Proof-of-Work, transactions on it are validated and the network becomes increasingly more secure, as hitting it with a 51% attack requires an increasingly large amount of computing power.

At press time, the hashrate on Bitcoin’s network has seemingly already started recovering, as it’s now at 88.3 million TH/s. Looking at hashrate distribution charts it doesn’t appear one single miner lost a large amount of computing in the last 24-hour period, although in the last few days’s pool seemingly went from 19% to 24.2% of the network’s hashrate.

While the price of bitcoin has been struggling to stay above the $10,000 mark, its hashrate has been growing exponentially in the last few months. In July CryptoGlobe reported it hit 74.5 million TH/s, merely one month after hitting 65 million TH/s.

In comparison, the Bitcoin network’s hashrate was of little over 33 million TH/s at the beginning of the year, and of 2.5 million TH/s in the beginning of 2017, before the bull run that saw BTC hit a near $20,000 all-time high.

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Morgan Creek Digital's Anthony Pompliano Explains Why He Is So Bullish on Bitcoin

Siamak Masnavi

On Tuesday (February 25), Anthony Pompliano (aka "Pomp"), a co-founder of crypto-focused asset management firm Morgan Creek Digital Assets, gave an interview -- to CNN's Julia Chatterley -- during which he extolled the virtues of Bitcoin.

Pomp focused on two main aspects of Bitcoin:

1. Bitcoin's Proof-of-Work (PoW) Consensus Mechanism and Its Energy Costs

He told Chatterley that Bitcoin is "the most seure computing network" in the world, and "it is going to take electricity or power consumption in order to power that security."

However, he said we don't need to get too alarmed by this since Bitcoin miners are "financially incentivized" to "find the cheapest power sources" because "that's how they make money."

Then, he pointed out that the cheapest form of energy is renewable energy, and so that is what they will try to use to power their mining hardware. In fact, he said that based on the studies he has seen, 60 to 80 percent of the energy being used is renewable.

2. Bitcoin's Store of Value Use Case 

"I think that store of value is really important. You have to have store value before you can have medium of exchange. 

"The store of value comes down to two things. One is security -- it can't disappear, it can't be hacked, etc.; and Bitcoin being the most secure computing network in the world, it is very secure...

"When it comes to price, what you want to see is, over long periods of time, either you're preserving your wealth, so the price stays flat, or it continues to increase.

"The monetary policy of Bitcoin relies on one thing: supply and demand economics -- artificially capped supply, demand increases, price will go up in U.S. dollar terms. And so, again, if you zoom out, over last decade, it's the best performing asset, over the last 12 months, up 150%, in the last you know what six weeks or so, it's up 30% or so.

"It's continuing to do exactly what it's kind of built to do. Now, there's high volatility on an intraday basis... but again people who put their wealth... in Bitcoin have been rewarded very well with this store of wealth thesis. And so we tend to think that the non-correlation with traditional assets will continue to be a valuable kind of aspect of Bitcoin."

Other Bitcoin-Related Topics

Pomp also responded to legendary billionaire investor Warren Buffett's most recent criticisms of Bitcoin by saying that although Buffett is "one of the best investors of all time," when it comes to technology, there are "better people to listen to." 

Finally, with regard to central bank digital currencies (CBDCs), here is what he had to say:

"These central back digital currencies are all coming, and really what I think people need to understand is all of the central back digital currencies are simply taking the existing monetary policy and changing the technology form factor.

"What Bitcoin does is it actually is a different monetary policy. It's not a fiat inflationary type model, and so ultimately we're going to have as a competition of currencies, but it's not going to be a competition on technology...

"We're going to have a competition of monetary policy... We believe that the Bitcoin monetary policy is superior to central bank monetary policies, and ultimately Bitcoin will be the winner, and will be the next global reserve currency."