In brief

  • The Bitcoin network’s hashrate reached an all-time high between 120-136 hashes per second.
  • Miners remain bullish long term ahead of the halving, despite the dip in the market.

The Bitcoin Halving is nearly upon us, and the Bitcoin network is bracing itself.

The network’s hash rate today reached an estimated all-time high of around 136 quintillion hashes per second, according to Blockchain.com, which monitors the metric. Other monitoring services like Bitcoin Info Charts put it at around 120 quintillion hashes, which would still indicate that it has almost tripled in the past year. 

Bitcoin’s hash rate generally measures the estimated computational power dedicated to the Bitcoin network. This accounts for things such as mining, public and private key creation, and the validation of blocks on the network. Miners also protect the network: the higher the hash rate and the more miners, the less likely the network is susceptible to a hostile takeover through a 51-percent attack. 

Jonathan Hamel, a Bitcoin advisor and researcher for the Academy of Bitcoin and the Montreal Economic Institute, is not surprised by the increased strength of the Bitcoin network. “Well-established miners are ramping up investments,” he told Decrypt. “I’m aware of a few major projects backed by traditional investment and private equity funds.”

Hamel believes miners, and the funds backing them, remain bullish on Bitcoin long term, despite the recent drop in price and even before the halving hype ramped up earlier this year. “That trend predates the halving narrative but seems to have gained traction since the beginning of the year," he said. 

The halving of Bitcoin mining rewards, which will see block rewards reduced from 12.5 to 6.25 bitcoins, is expected some time in May and is one of the most highly anticipated events in the crypto industry.

“With the halving, we're gonna have a clear picture of who are the efficient and profitable miners as the least performant ones can't mine at loss for an extended period," said Hamel.

Hamel is referring to how the network incentivizes the growing use of stronger computational power and infrastructure to win Bitcoin block rewards, whose problems become harder to solve and rewards become more scarce as the network lives on. In Bitcoin’s early days, hobbyists could mine the cryptocurrency with a personal computer. But now, Bitcoin miners rely on massive warehouses with thousands of computers to compete. These burgeoning facilities plus cheap electricity are catalysts for the Bitcoin mining industry.

Anthony Pompliano, co-founder and partner at Morgan Creek Digital, said he anticipates the hash rate will continue to grow in the coming year. “I believe that miners will continue to have a serious incentive to provide computing power to secure the network,” he told Decrypt. “These individuals or organizations will seek the cheapest persistent power that they can find.” 

Bitcoin miners, and their backers, are boosting operations ahead of the halving. Earlier this month, Peter Thiel-backed Layer 1 opened a massive Bitcoin mining facility in West Texas. Northern Data AG and Whinstone US are also set to soon open a 100-acre mining facility in the state. 

While some critics will point to the fact that China controls more than half of the Bitcoin hashrate, recent development in Texas, and growing operations in Canada, Georgia, Iceland, among many more countries, could signal a brighter, more decentralized future for Bitcoin.