Bitcoin (BTC) Continues to Surge as Its Mining Hashrate Decentralizes Further
Bitcoin (BTC) is once again gaining the attention of mainstream media and investors as the price has surged over 37% in the past week.
Bitcoin is now trading above $8,000 for the first time since July of 2018 and data suggests the fundamentals for the leading digital currency have improved markedly over the period.
In addition to the Bitcoin and Lightning Network adoption that’s taken place since last summer, including the recent launch of Fidelity’s Bitcoin custody service for institutional investors, Bitcoin has also seen the distribution of its mining hash rate improve drastically.
According to recently published data from crypto research firm Diar, a major shift has taken place in Bitcoin mining pool distribution, as the percentage of blocks mined by Chinese crypto mining giant Bitmain has fallen from over 50% to 36%.
This decline has given smaller mining pools the ability to gain traction in the network, with the percentage increasing from around 13% to over 23% in recent months.
This notable shift is likely at least partially due to internal strife at Bitmain. As we previously reported, Bitmain has decided to forego its listing on the Hong Kong Stock Exchange (HKEX), claiming that it has decided to focus on product development throughout 2019. Separate reports show that the company lost about $500 million in the third quarter of 2018.
While the distribution of Bitcoin mining pools has increased, Diar does note that the total number of pools has decreased, largely due to the previous bear market that lasted over a year.
“While the distribution of hash power is certainly better geared against coordinated attacks, the number of pools continues to dwindle,” states Diar. “To date, versus the start of 2018, 40% of the pools have now shut down.”
Improving prices and market conditions could work to reverse that trend, however, there is no indication of such a shift at this time. Bitcoin is set to undergo a block halving in a little over a year, where the block reward will fall from 12.5 to 6.25 coins.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.