- The Bitcoin network hash rate is near complete recovery from China's ban of mining.
- The metric has increased over 80% in the past five months and is close to a new all-time high.
- Bitcoin has demonstrated deep resiliency and antifragility in the face of a severe stress test and is about to overcome that completely.
The Bitcoin hash rate has showcased deep resiliency since the Chinese bitcoin mining ban, having climbed over 80% in five months to get close to its previous highs.
When the country with the largest share of Bitcoin hash rate at the time began enforcing nationwide efforts to crack down on the industry, a considerable amount of miners were forced offline. As a result, the Bitcoin network total hash rate plummeted to 84.79 exahashes per second (EH/s) in early July, per Coin Metrics data. The metric has since recovered almost completely, and at the time of writing, sits at 156.6 EH/s — less than 16% away from a new all-time high. It has retracted from a local top made at 167.18 EH/s on November 17.
The Bitcoin network implied daily hash rate (7-day moving average), year-to-date. Source: Coin Metrics.
"On-chain data shows that computational power deployed to the network is likely to continue heading higher and might hit a new all-time high in early December," according to a Kraken Intelligence report. "While many expected hash rate to hit an all-time high at the tail-end of December, the network is now pacing to beat expectations amid an ongoing surge in demand from miners."
As miners started relocating their farms and getting back online, plugging more hash power to Bitcoin, the network's mining difficulty began adjusting upwards. According to the report, there have been nine consecutive positive difficulty adjustments since July, a record-breaking stat resulting in a total 65.8% increase in mining difficulty.
"Though the latest recovery in difficulty suggests miners have by and large completed their migration to overseas locations such as North America, Kazakhstan, and Russia after being prohibited from mining in China, it's also a testament to the confidence in miners underpinning the network," per the report.
Bitcoin mining is also strong in another metric, miner revenue. The amount of money bitcoin miners make per day is important to gauge the industry's profitability and the future propensity for more investments and thus hash power to land in the Bitcoin Network. BTC miner revenue has been rising for the past five months, is already back to pre-ban levels, and is close to its previous all-time high.
Bitcoin miner daily revenue. Source: Coin Metrics.
Since the Chinese ban, bitcoin mining has thrived in other countries, more notably the U.S., Kazakhstan, and Russia. The three nations are now the top 3 bitcoin miners globally, having absorbed the hash rate that left the communist state.
The Bitcoin hash rate has moved away from China since the ban in the summer. Image source.
The industry has picked up pace quickly over the last few months in the U.S. Miners are increasing their investments, and states are looking for ways to attract them.
But bitcoin mining also is more than a profitable way to secure the Bitcoin network. The activity can help bring back financial sovereignty for impoverished communities and drive clean energy innovation.