Cryptocurrency portfolio tracking application, Blockfolio, polled its users on April 27. They asked whether they believe Bitcoin’s hash rate will be higher or lower one month after the halving.
The community has a positive outlook
Blockfolio’s question was answered by over 8,000 users. Among the respondents, 37% believed that the hashrate would be higher, 29% that it would be lower, and 17% that it would be the same. The remaining 17% admitted that they did not know. Philip Salter, the head of mining operations at mining firm Genesis Mining, told Cointelegraph that new mining application specific integrated circuits, or ASICs, should help preserve Bitcoin’s hashrate post-halving.
Salter explained that to understand the impact of the halving on Bitcoin’s hashrate, one must know several important data points. How Bitcoin’s price will develop, how much miners will stop their activity due to reduced profitability, and how much hashrate will be added due to new hardware. He explained:
“There is a new generation of [mining ] on their way, which should come online shortly after the halving. So that by default will increase hashrate. [...] It's evident from the survey results that people are unsure how to answer these questions. But more people think that hashrate will go up, showing a bullish sentiment on the price and [...] trust in the manufacturers to deliver on time.”
An expert’s prediction
Salter estimates that post-halving, the Bitcoin hashrate will be about 30% lower than it currently is if the price does not go up. If Bitcoin prices continue to go up on the other hand, he thinks the hashrate could stay stable after the block reward is reduced. He also noted that “much of the drop shouldn't happen immediately, since miners can't turn off instantly.” Still, he expects recovery to follow if the drop does happen:
“Midterm, the hashrate should recover quite quickly. Most [ASICs] that are turned off will be Bitmain S9, with an efficiency of around 90 W/TH. The new [ASICs] have ~30 W/TH, so can deliver three times more hashrate at the same power consumption. That gives us a good estimate of how much hashrate can increase without new farms being built. ”
Lastly, Salter expects Bitcoin’s network health to remain largely unaffected. He admitted that Bitcoin mining will slightly centralize due to less optimized operations stopping activity. The total electricity consumption will also decrease due to some operations halting. Still, he believes those changes will be only temporary. He says that new hardware will allow home miners to participate in Bitcoin mining again.
Bitcoin Cash (BCH) performed its own block reward halving earlier this month. Shortly after the halving, the network saw a 60% fall in hashrate, going from 4.36 EH/s to 1.6 EH/s in under a day. As a Cointelegraph analysis explained shortly after, the Bitcoin Cash halving decreased the network’s mining profitability and resulted in miners fleeing to competing blockchains.