Bitcoin hash rate suffers shocking 29% decline

Bitcoin has been dealt another bitter blow this morning with hash rate and mining difficulty both tumbling significantly as price consolidates at $6,600

Bitcoin’s mining difficulty and hash rate has fallen substantially overnight, prompting concern among investors and traders.

According to data from Coin Dance, Bitcoin’s hash rate has plunged from 136.2 quintillion hashes per second (EH/s) to 105.6 EH/s.

This is important because if Bitcoin has a lower hash rate it means competition among miners, which subsequently increases the risk of a 51% attack on the network.

Network difficulty was also left reeling after a dramatic 15.95% decline, with a forecast suggesting that it will face a similar drop in 14 days.

The reduction in both difficulty and hash rate has been attributed to the recent drop in price, which saw Bitcoin fall from $10,500 to $3,600 within a month before bouncing back to $6,600.

A drop in mining difficulty is typically considered to be a signal of miners exiting the market leading up to the uncertain block reward halving in May.

Bitcoin block rewards will be slashed from 12.5BTC to 6.25BTC in May in an event that is historically touted as bullish.

However, if hash rate and difficulty continues to drop the network could become vulnerable, which could well force more miners to exit the markets.

The halving will also need to accompany a hike in the price of Bitcoin as miners will need to ensure operating costs and overheads are met before the rewards are halved.

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