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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW:
Correlation between BTC Hash rate & Price:
Great explanation of hash rate:
Boyapati Tweet Thread:
1/ The #Биткоин block reward halving is less than a year away. How does the halving interact with Bitcoin's recurrent hype cycles, is it the cause of Bitcoin bull markets and what can we learn from past halvings?
Let's explore these questions in a thread 👇
— Vijay Boyapati (@real_vijay) June 24, 2019
The Litecoin halving of 2019 has officially happened. With a much anticipated event like this, it would certainly make logical sense to assume the price would rise. It’s been talked about for several months, the inflation of the supply is decreasing, you’d expect the demand to increase once the event occurs. But for those who may be new to this space, or for those who need a reminder, this is the perfect demonstration of “Buy the Rumor, Sell the News” Even though this mining rewards halving event was in no way a rumor since these events are hardcoded for Litecoin, if you take a look at what’s happened to the price of Litecoin leading up to this event, it’s clear that the price pump happened well before the event. There is plenty to be said about reducing the inflation of a coin and I for one am interested in seeing the benefits of this practice in the long run for any coin that observes this practice.
Halving events like these are an easy target for those wanting to look back at the history of a cryptocurrency to try and guess if the markets will behave the same in the future. Additionally, Litecoin itself is seen as a bit of a testing grounds for Bitcoin. For example, It often adopts upgrades to its network ahead of BTC. In the case of this halving event, and with Bitcoin’s own halving event to happen in about a year from now, I wouldn’t be surprised to see some people drawing conclusions about Bitcoin’s halving based on what’s happened with Litecoin this year.
There is a really interesting tweet thread that was posted by Vijay Boyapati where he explores events like the Bitcoin halving and how it affects the miners and the overall price of Bitcoin. For those of you who are interested in learning more about this or if you want to understand better how the miners play a role in distributing BTC and the selling pressure that accompanies it, I definitely recommend you check that out, I’ll leave a link to that down below in the video description.
Speaking of miners and Bitcoin, the average Bitcoin hash rate has increased by 10% in the past 2 weeks, moving up from 64.49 EH/s (exahash per second) өсөн 72.46.
In a day and age where everyone is trying to guess what the price of Bitcoin is going to do, examining the hash rate of a network is one indicator out of many that you might find helpful for coming to your own conclusions in that regard.
The definition of hash rate according to blockchian.com is “the estimated number of terra hashes per second (trillions of hashes per second) the Bitcoin network is performing,”
Increased hash rate generally means more miners are mining bitcoin, or that more powerful computers are being used which translates to more resources and money being invested in the future price of Bitcoin. Increased hash rate generally signals an increase of interest in Bitcoin (at least by the miners). In this particular case another contributing factor to this increase in average hash rate is the fact that Bitmain (a popular producer of mining hardware for Bitcoin) has recently unleashed its newest, fastest, and undoubtably most expensive hardware yet.
Trying to figure out what the price will do based on the average hash rate of Bitcoin’s network is much like trying to determine which came first, the chicken or the egg and there are arguments for both sides. Personally I feel that the hash rate actually follows the price and not the other way around. Miners tend to chase the price, allocating their resources towards networks that are more profitable at any given time and as the price declines, miners often have to move on to other networks if they can’t afford to take on losses.