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Blockchain mechanisms in times of crisis

12/24/2018
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Despite the fall in Bitcoin prices by more than 80%, the stability of the network is beyond doubt. The principle of self-regulation of complexity laid down by Satoshi Nakamoto allows the blockchain to operate with the same efficiency. This gives us hope that cryptocurrencies can indeed be an important element of the financial system of the future.

Hashrate and mining complexity

Miners are needed not only to open new blocks, but they also support the performance of the entire blockchain. They are the ones who confirm the authenticity of transactions. But when the price of cryptocurrency falls, interest in the extraction of new coins also decreases. Moreover, it may be below the point of profitability.

The principle of changing the complexity of the extraction unit allows you to maintain the stability of the blockchain in all situations. So, in the fall of 2018, the bitcoin network's hashrate lost almost 40% of its maximum capacity, dropping to 35 million TH / S. Many sceptics said that such a situation would adversely affect the performance of the network, and lead to its complete collapse.

However, this did not happen. The complexity of coin mining has fallen sharply, by more than 25%. This led to the fact that profitability again rose above zero. Of course, this parameter depends on many factors:

  • equipment level;
  • electricity cost;
  • software optimization skills;
  • the success of a specific pool.

But in general, it can be stated that a significant part of miners again began to receive income. As a result, the network hashrate began to grow. According to the end of 2018, it has risen to 37-38 million TH / S.

It is too early to talk about a sustainable trend. However, it is already becoming clear now that nothing threatens the blockchain as such. Even in case of a further fall in prices, the cryptocurrency network will be maintained in working condition. The pledged Satoshi mechanism has once again proved its effectiveness in a crisis situation.

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