Yesterday, Ethereum’s hashrate hit a new all-time high.
The peak of the Ethereum hashrate
Ethereum is currently still very much based on Proof-of-Work, like Bitcoin, although it is in the process of moving to Proof-of-Stake. This means that, for now, Ethereum is mined exactly like Bitcoin, albeit with a different algorithm.
After a sharp drop in Ethereum’s hashrate from 632,000 Gh/s on 19 May to 477,000 Gh/s on 26 June, the hashrate has started to rise again.
Yesterday saw a new peak at over 715,000 Gh/s, which is 13% higher than the 19 May peak.
However, it must be said that the current price is lower than that of mid-May, when it reached an all-time high of over $4,300, compared to $3,200 today.
The fact is that the hashrate can only increase slowly, because it requires the purchase and configuration of new machines, which are not always available immediately.
So it is normal that the current hashrate has grown to higher levels than in mid-May despite the fact that the price has fallen.
It is worth noting that the lowest hashrate peak of this cycle was in late March 2019, when it fell as low as 136,000 Gh/s, which is 80% lower than yesterday’s peak. At that time, the price was around $140, which is 95% lower than its current value.
Bitcoin vs Ethereum
Given that Bitcoin’s hashrate has also risen a lot since the end of June, though not yet back to its highs, it is safe to say that the mining crisis triggered by the new Chinese bans is finally over.
Many miners have shut down their operations in China, and among them some have moved elsewhere, particularly to North America where they have found fertile ground, and cheap electricity produced.
The curious thing about Ethereum, however, is that after the most recent London hard fork, which introduced the burning of part of the fees collected by the miners, a reduction in the hashrate was expected, precisely because of the reduction in fees collected. This was not the case as the price of ETH has since recovered, allowing miners to offset the loss of fees with a higher value of ETH.
It is also possible that miners expect the value of ETH to rise further, prompting them to mine as much as possible.
The fact that Bitcoin’s hashrate has not yet returned to its highs may suggest that some miners who were mining Bitcoin before the Chinese crisis are now mining Ethereum.
The famous pop singer Jason Derulo this morning asked on his official Twitter profile whether Ethereum or Solana is better.
Real question is Solana or Ethereum ?
— Jason Derulo (@jasonderulo) September 13, 2021
Solana’s price is by far the best performing of the major cryptocurrencies over the past month, up 12% against, for example, -18% for ETH and -13% for BTC.