Run the Numbers #03: Bitcoin’s Hashrate Over Time

Bitcoin & Data Science

2020.09.19

In Bitcoin, the hashrate is the total amount of computational power being used to by all the miners. In recent years, the amount of hashrate has grown exponentially to where it is now nearly 100 ExaHash per second (EH/s).

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Source: glassnode.com

The amount of new power coming onto the network has never been stronger, as many new miners anticipate the price of the asset to continue its historic rise. As we can see on Google Analytics, interest in hashrate hit a peak at the height of the 2017 bull market, but is now starting to tick up again.

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Google searches for ‘hashrate’ over time, source: Google Trends

Bitcoin mining is a foundational component of the network and Bitcoin as an asset. Despite its importance, mining has been among the least transparent and the least understood part of the broader Bitcoin ecosystem. This report by BitOoda serves to improve the transparency related to the composition of Bitcoin miners, which ultimately helps with understanding the state and health of the system. At Fidelity Center for Applied Technology (FCAT), we look forward to continuing our research of the Bitcoin mining space and helping to push the ecosystem forward. We thank the BitOoda team for their work, which we hope will elevate everyone’s understanding about this complex and fascinating part of the Bitcoin ecosystem.” – Juri Bulovic, Fidelity Center for Applied Technology

Some traders and financial analysts have attempted to use hashrate as a technical indicator to time the market. Below is a popular indicator called Hash Ribbons. A red ribbon is formed when a large amount of hashpower goes offline very quickly. This signals that many miners were unprofitable at that time and turned off their machines. Using the indicator, the ribbon would signal a time to enter a long position.

Source: glsasnode.com