20 sats \ 1 reply \ @faithandcredit 25 May 2022 \ on: Bitcoin Mining Difficulty drops 4.4%, to 29.90t -- reversing gain from previous adjustment bitcoin
A few months ago i was projecting/prediction fees for a standard transaction (140vBytes) of having to be around $50 to sustain the hashrate, but if it remains this stable, around these prices, then an on-chain fee for 140vB would seem to "only" have to be around $28 to sustain the hashrate in the absence of the block subsidy.
So we are learning a bit about the resilience the hashrate right now. Its still early, and its possible more hashrate will go offline if exchange rate remains here for a longer period of time. If not, that would be a bullish parameter i would argue.
Hashrate is going to continue going up throughout the year simply because newer, more efficient devices, have already been paid for, facilities have already been built to accommodate them (in many instances), and as soon as they arrive from the manufacturer, they are brought online promptly. I don't know that means that is a "bullish parameter". It means devices that are quite profitable to run even at these hashprice levels will continue to be brought online.
to sustain the hashrate,
If for some reason hashrate were to drop, let's say 30%, I hope the narrative does not become "bitcoin hashrate has dropped 30%, that means bitcoin is 30% less secure." We had a 50% drop after China mining ban. Bitcoin had some slower blocks but each difficulty reorg got that back to being closer to 10 minute blocks.
The reason the hashrate reached today's 220 EH/s is because revenue to miners (exchange rate * 144 blocks / day) supported 220 EH/s. Bitcoin was secure when it was only 100 EH/s. It was secure years ago when hashrate was only 1 EH/s.
And with halving now less than two years away, ... it's possible 30% (or whatever) of the hashrate will get powered down. Will that be a drop from 300 EH/s to 200 EH/s? Possibly. It all depends on what the exchange rate does.
As far as bitcoin's security from mining., what matters is that there is not an adversary (or cartel) that has 51% of the hashrate and attempts a silent chain fork for the purpose of a double spend.
This attack would likely involve existing hashrate so it would appear as hashrate dropping suddenly as some percent of existing known hashrate is taken "offline" in order to participate in the attack. But there's no rational economic incentive to do this -- unless you are maybe a nation state seeing bitcoin as an existential threat. And I think if that were to occur, that would have been the result of the price being be much higher (order of magnitude), and thus hashrate much higher (roughly at a similar degree, even with the halving) than today's hashrate.
tl;dr: Hashrate follows price, and not the other way around. Don't try to gleam a price signal from what the hashrate looks like.
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