The computing power of the Bitcoin network has largely recovered after its second biggest drop in history. According to Coin Metrics, the network’s total computing power—known as the hash rate—is back up to normal 2020 levels following a dramatic plunge last month.
The Bitcoin hash rate represents the sum of the computing power of the miners on the Bitcoin network. A high hash rate shows that more miners are working harder to find new Bitcoin blocks, while at the same time keeping the network secure from attack.
“Bitcoin miners have shrugged off the second largest difficulty drop in its 11 year history, with hash rate comfortably returning to the range it has spent most of 2020 in and difficulty bouncing back 6%,” Coin Metrics tweeted.
Why Bitcoin’s hash rate dropped in March
The Bitcoin hash rate dropped considerably between March 12 and 21. This coincided with a massive drop in price, as Bitcoin fell from $9,000 to as low as $4,500 in the span of two days.
Since the price of Bitcoin had halved, Bitcoin miners found their revenue slashed by 50%. While conditions are different for each miner—each has varying electricity costs, machine costs, staffing costs, etc.—the Bitcoin price crash saw many miners become unprofitable. As a result, they dropped off the network.
The Bitcoin price has since bounced back up to $6,700, up 50% from its lowest point; as the prices have returned, so have the miners. The hash rate is up 15% from its recent drop, suggesting some of the miners have returned.
Another factor may have helped the miners come back online. The Bitcoin network automatically adjusts the mining difficulty to ensure that blocks are mined roughly every 10 minutes. When the hash rate dropped, so did the mining difficulty. With blocks easier to mine, miners were able to increase the rate of getting rewards, adding to their revenue.
The hash rate resurgence comes just 33 days before the Bitcoin halving. On this date, the Bitcoin mining rewards will get cut in half—chopping miners’ revenue in half. But by the look of things, miners aren’t going anywhere.