Bitcoin’s hash rate fell 50% from its May peak

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Bitcoin’s hash rate, the computing power used to mine new blocks, has fallen 50% from its peak in May.

According to The Block’s data dashboard, the hash rate fell from 180 EH / s on May 14 to its current value of 90 EH / s.

As a result of this reduction, bitcoin’s hash rate has returned to levels last seen in May 2020. It also significantly reverses the long-term uptrend and is the biggest drop in history.

As The Block reported, the main cause of the drop in the hash rate is the crackdown on bitcoin mining in China. After a high-level comment was made at the Chinese State Council meeting last month, regions across China began issuing warnings to miners to cease operations. This led to a huge drop in China’s contribution to the hash rate.

Another impact has been the drop in the price of bitcoin, which went from a record price of $ 63,500 in April to its current price of $ 35,300. This has made bitcoin mining less profitable (although the drop in the hash rate will offset that).

Drop in chain metrics

Bitcoin’s hash rate isn’t the only on-chain metric on the decline.

The number of daily transactions on the bitcoin network has fallen to levels not seen since July 2018. According to the dashboard, only 200,000 transactions are made per day (on average over the last seven days).

There was also a drop in the number of active addresses on the network, although it only returned to April 2020 levels. The number of daily active addresses fell from 1.23 million to 765,000 per day. day and far fewer new addresses are created each day.

Bitcoin transaction fees are also much lower now, although this makes the network cheaper to use. They fell to around $ 7 per day on average, from a peak of $ 54 per trade in April.

The only metric that defies the trend is the capacity of the Bitcoin Lightning network. Since the start of the year at around 1,000 bitcoins ($ 35.3 million at current prices), the amount of bitcoin stuck in the network has grown rapidly, reaching 1,640 million ($ 57.9 million) today. hui.

2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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