15 Feb 2022 Arjun Agarwal
Bitcoin Hashrate Reaches A New High As BTC Rebounds
The past 30 days have been nothing short of a roller coaster ride for Bitcoin in terms of price performance – swinging from a high of $45,661.17 to a low of $33,184.06. Nevertheless, some aspects of Bitcoin’s performance are continuing their upwards path, as the hash rate.
Source: Crypto Browser
Indeed, Bitcoin recorded a massive spike in its hash rate, leading to a new high of 248.11 TH/s in a period of 24 hours. The increase in the hash rate indicates an uptick of miner support, as mining is not only profiting the miners through block rewards and transaction fees, but Bitcoin miners also help to secure the network with their activities which is why the recent surge is important.
According to data from Blockchain.com, Bitcoin’s hash rate struck a bottom in July 2021 and since then it has been on a constant increase trajectory. Starting this year, Bitcoin’s hash rate bounced from around 170 TH/s to reach a consolidation point of around 200 TH/s. However, between the 11th and 12th of February, Bitcoin’s network witnessed a massive spike, pushing the hash rate up 31% to a high of 248.11 TH/s.
Delving further into the hash rate graphs, it turns out Bitcoin’s mining ecosystem managed to recover from the China crackdown on mining that saw the hash rate from the region crash to near zero.
Why Is Hash Rate Rising?
Immediately after the China crackdown, large-scale miners pushed even harder for a piece of the pie. However, the overall number of miners increased, particularly due to many new players and small-time miners ramping their activities. Also, large-scale miners migrated to countries like Russia and Kazakhstan, which made them among the top mining forces worldwide, right after the United States.
Furthermore, small-scale miners have been collecting forces into mining pools, where they pool their hash rate together, thereby increasing their chances of finding a block.
All factors combined, Bitcoin’s hash rate will continue to rise as more players move into the mining industry. Furthermore, Russia and Kazakhstan are on the path to overtaking the United States to become the countries with the highest hash rate.
Kazakhstan And Its Mining Tax Issues
Despite becoming a worldwide mining force, the world’s second-largest block reward mining hub might become hostile to miners in the near future. The reason – the local government has proposed raising the taxation on electricity consumed by miners by 500%.
Kazakhstan’s popularity surged as a refuge to Chinese mining companies, with many relocating to Kazakhstan. However, Kazakh authorities are set to raise taxation on electricity consumed by miners fivefold, which could escalate the conflict between the miners and the government on energy usage.
The 500% tax increase was pushed by Vice Minister for Finance Marat Sultangaziev, who wants to raise the tax from one tenge ($0.0023) to five tenge ($0.012). Furthermore, Marat proposed an additional monthly tax on the ASIC mining rigs, whether or not they mine digital currencies or not, or even if they didn’t turn the machines on.
The new taxation proposal comes when Kazakh miners are struggling with energy and Internet issues, with Internet shortages practically decimating all mining activities in Kazakhstan for several days. Furthermore, the rise in energy demand during the cold winter seasons, combined with ‘significant energy imbalances’ has meant that miners face weeks without access to electricity.
To further add fuel to the conflict, the Kazakh national electricity supplier KEGOC announced that due to the power shortages, it would cut off power to block reward miners until January 31. However, numerous reports suggest that many miners are still yet to get reconnected, leaving them unable to operate their mining rigs.
If Kazakhstan resumes electricity supply to miners, it wouldn’t be long before Bitcoin’s hash rate would yet again record a high.
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