Yeah! Today, the bitcoin price blasted through 52,000 dollar (or 44,000 euros). October is off to a fantastic start. Since the beginning of the month, the price has risen by more than 15 percent. This brings the price almost back to the level of 7 September, the day El Salvador embraced bitcoin as a means of payment.
But apart from the price, there is another important development. The bitcoin hash rate has returned to levels not seen since the end of 2020. According to blockchain analysis firm Glassnode, this is a really important development. Bitcoin is coming back after China banned bitcoin mining.
What is the hash rate?
Bitcoin miners solve cryptographic puzzles to add transaction blocks to the blockchain. As a reward for this, they receive a fixed amount of bitcoin and all transaction fees from individual transactions.
The higher the hash rate, the more secure bitcoin is. If you would like to hack the bitcoin network, then you need at least half of the total hash rate. This is called a 51%-attack. The hash rate is currently so high that hacking bitcoin is virtually impossible as an individual.
Bitcoin largely recovered
Right now, bitcoin’s hash rate has almost completely recovered. This is remarkable, as in May approximately 50% of all bitcoin miners were forced to pull the plug. Some of these miners have probably found refuge on other continents, such as North America and Europe.
Data from Glassnode shows that the total hash rate has increased by 39% since the end of July. This is the largest increase since December 2018. Currently, the hash rate is back at the level it was at the end of December last year.
Mining revenue on the rise
Last year, rewards for miners were cut in half as a result of the bitcoin halving. Miners now receive 6.25 BTC per transaction block, instead of 12.5 BTC.
This had a short-term impact on miners‘ revenue in dollars, which was also halved. But with the bitcoin price rising and the bitcoin blockchain becoming more crowded, revenue is increasing again. Miners were generating $40 million to $48 million in daily profits in September. The record amount of daily profit was reached at the end of May: a staggering $60 million.