Emiliano Grodzki is CEO and founder of Bitfarms, one of the largest public bitcoin mining operations in the world.
What we have learned from the fall of the Bitcoin Hash rate
Bitcoin has been very high lately. Still, the weekend panicked after a significant drop in the network hash rate, which dropped by about 49%, the largest 24-hour reduction in Bitcoin history.
Much is being speculated about the cause of this fact, including coal mine explosions and power outages in China’s Xinjiang province. And with a decrease in the Bitcoin hash rate, a price correction brought its value down to a minimum of ~ $ 50,000. Still, despite the panic sale, we didn’t break the important $ 50,000 level. Because?
Simply because Bitcoin continues to run at 100% despite the fall in the hash rate. Transactions are being processed, blocks are being extracted, and currencies continue to be traded and exchanged freely.
The Bitcoin hash rate may have fallen more than 40% in a single day, however, what global monetary rule or payment network could survive something similar and not have a single user denied the service? Fast? Visa? Mastercard? The dollar, the pound, the euro or the yen? There are none.
Far from being a concern where Bitcoin is headed, this is a testament to the resilience of the Bitcoin protocol and the strength of its decentralized design. Regardless of which entity operates, Bitcoin cannot be stopped by any event, which is what lawmakers and world governments quickly realize.
According to Garrick Hileman, head of research at Blockchain.com and a member of the London School of Economics, 2021 is the year governments will start introducing bitcoins. He highlights this in government spending and the printing of large sums of money and the economic and geopolitical tension between the United States and China.
Of course, regardless of whether these factors push governments to resort to bitcoin, it is thanks to the millions of people around the world that Bitcoin exists. By investing our capital, time and effort in bitcoin mining and its infrastructure, we are deciding that Bitcoin exists. And as long as there is a miner, the Bitcoin network will continue.
Of course, block processing would be slow, but they would still be processed, and after a period of time when enough blocks have been added to the network, the difficulty would adjust and the performance and processing times would return to normal levels.
There are still bumps in the way to soften, but what is being created with Bitcoin is a new monetary system for anyone who understands what’s going on with the current one. Open, transparent, resilient, and voluntarily driven by economic incentives, Bitcoin is now too big to fail.
A sale due to temporarily slower lockout times is not backed up by any reason other than panic and is a strong indicator of how much new money Bitcoin has recently entered and the learning curve it is leading to. term capital.
Last year has shown how bitcoin will go nowhere at any time and how important it will be in our financial lives. Bitcoin value falls will be safe in the future, but the outlook has never looked so bright.
This is a guest message from Emiliano Grodzki. The views expressed are wholly their own and do not necessarily reflect those of BTC, Inc. o Bitcoin Magazine.