Bitcoin hash rate increases as Ethereum miners switch to Bitcoin mining after Merge
With the Merge upgrade, Ethereum (ETH) discarded its Proof-of-Work (PoW) mining algorithm and shifted to Proof-of-Stake (PoS) validation and an intriguing trend arose in the cryptocurrency sector.
According to the latest ‘State of the Network’ newsletter published on December 13 by the blockchain analytics software CoinMetrics, some Ethereum miners have exchanged their ETH mining equipment for ones that can mine Bitcoin (BTC), hence increasing the BTC hash rate.
According to the research, Bitcoin’s hash rate grew steadily over the majority of the fourth quarter of 2022, possibly as a result of operators repurposing their formerly Ethereum-focused GPU industrial rack space for Bitcoin mining-enabled ASICs.
According to the study, the increase in the BTC hash rate, which measures the computational effort required to verify transactions and protect the network, occurred simultaneously with the release of the Merge update:
The Bitcoin hash rate increased rapidly from 220 EH/s to 250 EH/s immediately after The Merge’s completion in September, albeit the precise extent of this resource reallocation is difficult to quantify.
In spite of this, the continued aftershocks of the collapse of FTX, previously one of the world’s biggest crypto exchanges, have put downward pressure on the price of spot BTC as well as the hash rate, presenting a new set of hurdles for the miners.
The mining difficulty of the flagship digital asset, the built-in parameter that automatically changes every two weeks to keep block times under control, has reduced by almost 7%, the greatest drop since miners were expelled from China in the spring of 2021.
At press time, the price of the first cryptocurrency was $17,686.33, representing a daily decrease of 0.76% but a weekly and 30-day recovery of 5.10% and 5.33%, respectively.
According to CoinMarketCap statistics received on December 15, Bitcoin maintains its position as the biggest digital asset with a market valuation of $340.19 billion, followed by Ethereum with a market cap of $157.53 billion.