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There has been a large recovery in Bitcoin network’s computing power following its second biggest fall in history. Coin Metrics revealed that the network’s total computing power (also called the hash rate) has returned to normal 2020 levels after a substantial decline in March 2020.
The hash rate stands for the miners’ aggregate computing power on Bitcoin network. When the hash rate is high, it is a sign of more miners’ harder efforts towards finding new Bitcoin blocks, together with the sustenance of the network’s security from attack.
According to Coin Metrics on Twitter, Bitcoin miners are gone past the second biggest difficulty decline in eleven years, as the hash rate has returned to the range it had been for the most of this year, and difficulty surged higher by 6 percent.
#Bitcoin miners have shrugged off the second largest difficulty drop in its 11 year history, with hash rate comfortably returning to the range it has spent most of 2020 in and difficulty bouncing back 6% pic.twitter.com/2fRf3Tj9tA
— CoinMetrics.io (@coinmetrics) April 12, 2020
A considerable decline in the hash rate occurred between Mar. 12 and 21. It happened when the price of Bitcoin dropped massively from $9k to as low as $4.5k within two days.
The 50 percent decline led to a 50 percent slash in Bitcoin miners’ revenue. Numerous miners became unprofitable due to factors like electricity costs, machine costs, and staffing costs. Hence, they abandoned the network.
Since then, the price of BTC retraced up to $6.7k which represents 50 percent upsurge from its lowest point. Due to the rise, the miners have returned. From where it was after the drop, the hash rate is now 15 percent up, pointing to the return of some miners.
There is another factor which may have aided the miners’ return. There is always an automatic adjustment of mining difficulty towards ensuring the mining of blocks at about 10 minutes interval. Mining difficulty is reduced when the hash rate is reduced. When block mining became easier, miners increased the rate of obtaining rewards, thereby increasing their revenue.
There are only 33 days to the next Bitcoin halving. It seems miners are going nowhere despite that their mining rewards will be halved on this date.