Bitcoin Hash Rate Peaked at "the Halvening"
The Bitcoin Hash Rate peaked near the day of the reward halving and is since on a decline. This could mean that capital investment in mining has slowed or may just be a statistical dip in the hash rate variation (however this is statistically unlikely at α<.05).
Considering the BTCUSD price has been fairly stable for the month prior, this reality is not at all unexpected. If this trend is true and miners are operating anywhere near where Marginal Cost equals Marginal Revenue, then the only way we will see an increase in hash rate again is if the cost of electricity goes down or the value of the subsequent mined coins go up.
Is hashing power moving to other crypto-networks? Are miners turning off their machines? Is this a blip in the trend? Is this what the eve of the Collapse of the Hittite Empire looked like? Or should we care...yet?
Zoom out...
https://blockchain.info/en/charts/hash-rate?timespan=all
From mid 2014 until Fall 2015 the hash rate was relatively flat. What else was flat? The price. Price doubled, mining became more profitable, money flooded back into mining before the halving. Now it will level sideways until the price moves up again. If the price doesn't move up or moves down, maybe we see some drop in the hashrate, but I think this is overblown as many miners have invested thousands into equipment just in the past year, as you can see in the chart I linked. So they have no real reason to not utilize what they've recently paid for, even if it is barely profitable.
Great reply...On a 180 day time scale, the variation is statistically significant at the 95% confidence. I did not look on a larger scale because of the degree of variation.
Also, I would add that Microeconomic theory, and Finance 101, would say to ignore sunk costs (bought machines) and calculate ROI based on marginal cost (cost of electricity).
100% agree with ignoring sunk costs, except with crypto being speculative by nature, I think any short term hits to USD ROI can be written off by mining and holding until price rises in the future. They just ration their sell offs to cover costs, and hold the rest in BTC to realize future gains.
We also know that there's plenty of uber-cheap electricity in places like China right now, so once new asics start flooding the markets I can't imagine them not going to use. This will probably push these miners barely getting by out at that point. Either way, it's always interesting to sit back and watch the correlations between hashrate and price, especially since Bitcoin is still so young.
Btc is the Taiwan of the crypto market and a safe haven I look for value to increase. If you want to by alt coins it is likely you have to buy Bitcoin to do it. Etherum is still to controversial.
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