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Bitcoin more secure than ever as Hash Rate hits all time highs by jrcornel

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bitcoin · @jrcornel · (edited)
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Bitcoin more secure than ever as Hash Rate hits all time highs
# Bitcoin is currently more secure than ever before

As I type, bitcoin's hash rate is making new all time highs...

With the total hash rate hitting 119 quintillion hashes per second earlier today.

As you might recall, the total network hash rate is the input of total computing power put into mining and validating the bitcoin blockchain. 

The larger the number the more secure the blockchain is.

As I type, that number is hitting new all time highs:

https://i.postimg.cc/zX2dHN9J/18a93b7455f4aa8d56ade2a84d439a02.png

(Source: https://www.blockchain.com/en/charts/hash-rate)

Which means the bitcoin network has never been more secure than it is right now.

# Why does this matter?

There is some debate to this, but many in the space claim that price follows hash rate.

Meaning that if hash rate is making new highs, like it is now, then the price of bitcoin will also eventually start making new highs as well.

I am not sure I fully agree with that, but some out there smarter than me seem to think so.

Personally, I would think it is the other way around, that the hash rate is a lagging indicator of the price.

As the price goes up, more miners eventually get involved as they can do so profitable and this in turn drives the hash rate higher.

It keeps going higher until the difficulty adjusts upwards to a point that mining is no longer profitable for even the lowest cost miners.

Max Keiser, however, says hash rate precedes price:

https://cointelegraph.com/news/max-keiser-new-bitcoin-network-hash-rate-high-suggests-price-is-next

# The network is more secure either way...

Either way, a rising hash rate means the network is more secure which gives people more confidence in using the network.

And that confidence may help prices go up as more and more users are added to the network.

Which, I believe, is along the lines of Keiser's thought process as well.

So, no matter how you slice it, a rising hash rate is a good thing.

Stay informed my friends.

-Doc
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@mtl1979 · 
Security of the network has nothing to do with total network hashing power... It has more to do with relative hashing power of largest mining pools... With Bitcoin there is only few large mining pools that compete with each other for block rewards.
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@jrcornel · 
Technically, though the higher the total hash rate the more secure in general. To get more specific, yes one would need to know who is responsible for how much hash rate to get a clearer picture of the decentralization.
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@mtl1979 · 
It isn't secure at all if... 

1. one pool has more than 50% of the total network hashing power.
2. two largest mining pools have more than 33.3% each.
3. three largest mining pools have more than 25% each.
4. four largest mining pools have more than 20% each.

This is because relative hashing power is more important than total hashing power... 100% is essentially hashing power of largest mining pool, not the total network hashing power.

If one of the larger mining pools go offline or cause network to split as two alternate chains, all the other mining pools have to be able to compensate.
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@zacknorman97 · 
Thanks for sharing the update. 

I also don't fully agree on a correlation between hash rate and BTC's price, at least not directly. However, rising hash rate may certainly change the market perception for miners and long-term investors - and it could sweeten the recent sour moods for Bitcoin's market.

Confidence in the markets are what keeps it steady and growing, and higher network hash rates are always a better thing :-)
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@jrcornel · 
Yep, I think that is Keiser's theory as well. Confidence in the network draws more money in to use it, which causes prices to go up.
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