What is the Bitcoin hashrate? How is it measured? What does a high or low network hashrate indicate for the rest of the Bitcoin network?
Several weeks ago the price of Bitcoin crashed from $10,000 to $8,000 dollars.
The perception was that the Bitcoin hashrate had crashed 30%.
Investors view the total network hashrate as a bid for miners to buy the bitcoins being released in the next block.
High hashrate tends to move the price up. Low hashrate tends to move the price down.
But because people misunderstand how hashrate is measured investors saw a “crash” in hashrate that didn’t reflect reality.
In today’s video, I show you what hashrate is, AND how it’s measured, so you understand why this crash wasn’t real.
Check it out and let me know what you think in the comments?
HERE’S WHAT I COVER:
What hashrate is. (The total number of hashes being computed by the miners in the network)
How you can instead think of the blockchain as a timechain, or a decentralized clock. Why that clock needs to keep time.
The 3 primary types of clocks and how Bitcoins timechain is different.
How the timing of this decentralized clock is measured with blocks and regulated by proof-of-work.
Why the blockchain is trustless. (It doesn’t check any 3rd party source of time.)
How the blockchain is permissionless. (Miners are allowed to join or drop off at any time.)
Why the property of permissionless, makes regulating the timing of new blocks tricky. And how it’s controlled by a feedback control loop.
To Your Expanded Understanding!