Coins hashing rate power decrease through low ming activities
The Ethereum hashrate has slightly fallen from its previous highs in the past few months, with significant losses from 294 Terahashes to as low as 246 Terahashes per second. The drop started back around January through February of this year. This has been one of the biggest decreases in the Ethereum network hashrate since its inception back in 2015. This has made some mining operations unprofitable for Ethereum miners, this has caused a lot of stress to individuals and in response to turning off their GPUs or transferring their ethers to an alternative cryptocurrency. However, with further research into the market, a cryptocurrency miner may see that this may not be the best solution to the market decrease of the internal coin fo ethereum, the ether.
This is because the cryptocurrency has suffered significant losses from more than $1100 to $400, which it then hit the price range of $167 and back up to approximately $220. These kinds of price swings can be hard depending on the size of the mining operation and payment schedules planned. This may lead miners to not be able to cover their monthly or weekly costs , which leads to some taking the decision to close operations while others just walk through the rainy Financial days.
This signals to older investors that the Ethereum market may have reached its production floor, much like Bitcoin did back in 2014 to 2015. Bitcoin saw significant losses in its hashrate, which made a lot of Bitcoin miners fill for bankruptcy, mostly based on a short term investment in the technology.
There are currently a few efficient ASICS that have been displayed on to the market in order to mine ether. Because of the jumping hash power of some cryptocurrencies. It does not seem however that these ASICS have been active as this is not being shown in the data.
Mining of cryptocurrencies is a powerful activity
In the case of Bitcoin, there has been a lot of ASICS miners that have been shown to work effectively, this seems to be taking longer for this to have much of an effect on the mining of Ether as the hashrate power has been falling.
Ethereum is focused on moving from POW to POS which will most likely cause a fork in the Ethereum code in order for these ASICS miners to work at high capacity.
The applications of these minors will start to hurt if the issuance of ether drops to 33%. But only if the price remains stagnant which will in return reduce miners fiat profits to about the same 33% in revenue.
However, most crypto enthusiasts know that cryptocurrency is still within a very volatile market and that caution must be taken, in order to avoid big losses in a new emerging market. Some smart miners have no problem with these kinds of occurrences as they have well-organized plans for these types of risks. Proof-of-Work POW has always been a very competitive and energy intense business, this makes the designing of the network focuses on mining operations become self-organized without the need for any central coordination or authority backing it. Which means some will have to make changes while others keep turning in order to resolve any incoming issues, like reducing prices and hash rate volatility.
What is your thoughts on the markets crashing in the past few months? Please feel free to leave a comment below.