The Bitcoin network’s hashrate has reached a new all-time high above 120 million TH/s, after tripling over the last 12 months, from around 40 million TH/s in January of last year.
According to data from Blockchain.com, Bitcoin’s hashrate has been growing exponentially over the last few months, as BTC miners are likely trying to mine as much as possible before block rewards are cut in half in May of this year.
Block rewards are set to drop from 12.5 BTC to 6.25 BTC in May in what’s known as the halving. Every 210,000 blocks, or about every four years, block rewards are cut in half on the cryptocurrency’s network, effectively reducing the rate at which new BTC enters the market.
The halving reminds investors of the cryptocurrency’s scarcity, and helps ensure its inflation rate is stable until all 21 million bitcoins have been mined. Data shows there are now 18.15 BTC in circulation, which means most bitcoin has already been mined.
Some analysts claim bitcoin miners are deploying as much hashrate as possible to compete for the BTC left to be mined ahead of the halving, as if prices don’t increase their revenue will simply be cut in half. More hashrate means BTC’s network is more secure, as more computational power would be needed to alter the blockchain.
It’s worth noting reports suggest two-thirds of the Bitcoin network’s hashrate come from mining facilities located in China, which is a major mining hub thanks to its cheap electricity and favorable climate.
Bitcoin has been through two halving events in the past. The first one, on November 28, 2013, saw the cryptocurrency’s block rewards drop from 50 BTC to 25 BTC, and the second one, on July 9, 2016, saw its rewards drop to the current 12.5 BTC.
Historically, bitcoin’s price has increased after every halving. While some believe the supply drop is already being priced in, others like hedge fund manager Charles Hwang predict BTC’s price will hit $100,000 during the next rally caused by the upcoming halving.
Featured image via Unsplash.