Fundstrat Advisors, a market research firm owned by prominent Bitcoin bull Tom Lee, posted an analysis this week showing that the Bitcoin hash rate has doubled since May, despite a price correction of more than 30%.
Despite $BTC bear market, hashpower doubled since May to 57 EH/s – Even with upgrades to existing equipment, implies almost 1GW of new power consumption vs 5.2GW in May '18. Breakeven now $7300 ($5300 cash BE) vs. $6000 in May – Mining becoming FCF -ive @fundstrat #Crypto pic.twitter.com/pTTWJWlrz0
— Sam Doctor (@fundstratQuant) September 14, 2018
According to the tweet, which was posted by quantitative analyst Sam Doctor, the global hash rate for Bitcoin has increased to 57 EH/s. As a point of reference, this same hash rate first surpassed 1 EH/s back in 2016, indicating that mining operations continue to ramp up given the gains in the last few months.
Doctor’s analysis also showed that the break-even cost of mining 1 Bitcoin stands at $7,300, up from $6,000 in May. This calculation includes the depreciation costs of mining equipment and suggests the “fair price” of Bitcoin. Given this information, the cost of mining 1 BTC is roughly 12% higher than current prices.
While an increasing global hash rate is a sign of health for the Bitcoin network, it ultimately squeezes out lower end miners, giving more network control to the larger mining pools.
For instance, Bitmain, which designs application-specific integrated circuit (ASIC) chips and manufacturers cryptocurrency miners, currently owns two of the largest Bitcoin mining pools, BTC.com and Antpool, which account for 18.5% and 13.1% of the total network, respectively.
This sort of control worries some that a potential future 51% attack could be possible against the Bitcoin network, which has led many altcoins to adopt ASIC-resistant mining algorithms.