In mid-August, multiple news outlets reported that the bitcoin network would soon experience as massive uptick in mining hashpower. Those reports appear to have been well founded, with the bitcoin blockchain registering a record-breaking 98.5 EH/s on September 10. By comparison, the hashrate just a month earlier was 75 EH/s. This spike in mining power suggests that tens of thousands of new high-end bitcoin mining rigs have recently come online.
As a result of this unprecedented influx of mining power, bitcoin’s mining difficulty also experienced a dramatic increase, jumping from around 11 trillion to just under 12 trillion on September 13. The mining difficulty number automatically adjusts every 2,016 blocks — approximately every two weeks — to account for changes to the network’s overall hashpower. This difficulty change is the second largest increase in the history of bitcoin, with the largest difficulty jump of 1.13 trillion happening back in June.
The sudden increase in the network’s hashpower isn’t exactly a surprise. Major bitcoin mining hardware maker Bitmain recently confirmed reports that it had received some 600,000 current-generation mining ASICs from Taiwanese chip foundry TSMC. That order alone was estimated to represent a 50% increase in Bitmain’s overall mining power, the equivalent of adding 4,150 new Antminer S17 Pro units to the network. Consumer electronics firm Samsung also entered into the mining hardware market earlier this year, supplying a wide range of Bitmain’s competitors.
Increases in the bitcoin network’s hashpower do have a loose correlation with the price of BTC, suggesting that a substantial price increase is likely in coming weeks. The increase in hashpower may also be tied to the 2020 “halving” event, when the reward for solving a bitcoin block falls from 12.5 BTC to 6.25 BTC. The halving is predicted to happen on May 15, 2020, giving miners just nine more months to earn BTC at the current block reward.