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Bitcoin Miners safeguard the Bitcoin Network with the power of their hash rate
Bitcoin blockchain is embedded with certain specific natural mechanisms, to keep it in balance. This means that whatever the price of Bitcoin, there will be incentive for Bitcoin miners to keep validating Bitcoin blocks, which is essential for preserving the network security of the Bitcoin Blockchain. The activities of Bitcoin Miners prevent a third party from taking over the Bitcoin Network. This is possible with Bitcoin Miners retaining control of the Bitcoin Blockchain by devoting their computational power or hash rate which safeguards the Bitcoin Network.
Hash rate of the Bitcoin Network correlated with the BTC price
Generally, the hashrate is related to the Bitcoin price, higher the price of BTC, higher the hash rate as more Bitcoin miners would be participating in mining the Network, attracted by the higher earnings they can make through block mining rewards and transaction fees. Inversely, when the BTC price goes down, many Bitcoin miners would shut business, as they would not be making enough money through Bitcoin mining, which declines the hash rate devoted to secure the Bitcoin Network.
Stable hash power for Bitcoin network’s security is automatically ensured
However, the Bitcoin Blockchain has another procedure that will operate on to take care of the hash rate fall scenario resulting due to the fall in BTC prices. Here, the Bitcoin Difficulty will be lowered, so Bitcoin Miners can afford to enter back to pursue their bitcoin mining activity, with the mathematical equations that they need to solve to validate blocks becoming easier, requiring them to use lesser computer processing power as well to validate blocks.
This is what happened in March, the Bitcoin Price crashed, that was followed by decline in hashrate which in turn triggered Bitcoin mining difficulty to decrease which led to subsequent rise in hash rate. Therefore, Bitcoin Blockchain does not need a stimulus package to survive, beat that!!
Reference article - https://cointelegraph.com/news/no-bailouts-required-bitcoin-difficulty-to-rise-as-hash-rate-recovers
Surety that a bitcoin block cannot be mined prior to 10 minutes!!
When the Bitcoin network’s hashrate is high due to Bitcoin’s price increase, Bitcoin mining difficulty increases, making sure that the miners cannot mine a Bitcoin block before 10 minutes. Thus Bitcoin supply cannot be made to increase by any force, amazing is it not?, maybe that is why there are still Bitcoin maximalists, although practically still Bitcoin has drawbacks but won’t discuss it here.
The current Bitcoin Mining business situation
Image by InstagramFOTOGRAFIN from Pixabay
Right now, the increased hash rate is going to trigger an adjustment in mining difficulty on April 21st, with an increase in mining difficulty. There is only going to be strong mining players now, with bitcoin miners who could not afford to operate already out from participation in the bitcoin mining business. I also presume, the increase in the bitcoin mining difficulty over the years has led to the rise of costly bitcoin mining machines for mining, now without buying owning the lastest bitcoin mining machine in the market, miners can’t mine Bitcoin these days .
Reference article - https://cryptonews.com/news/bitcoin-mining-difficulty-set-for-biggest-jump-since-mid-sep-6335.htm
