Over the previous year, Ether (ETH) has increased in value to the point that it significantly outperformed Bitcoin (BTC) in terms of returns. The rise of Ethereum has made mining on its network more lucrative over time. This appears to have resulted in additional miners, resulting in an expansion of the network's hash rate.

The hash rate for Ethereum has hit a new high, approaching record levels of 1.11 PH/s according to data from Glassnodes on Jan. 27. The previous ATH was reached previously on Jan. 13, when the ETH price fell from $4,460 to $3,160.

ETH

Source: Glassnodes

When the hash rate rises, it indicates that more nodes are joining the network, and the network is becoming more decentralized. As a result, such an increase helps to cement blockchain security. However, if the hash rate is too low, it may be detrimental to the network since there would be fewer nodes, resulting in slow transactions and less security.

In December 2021, Ethereum network participants implemented the Arrow Glacier upgrade, which pushed back the switch to proof of stake consensus. It also means that Ethereum mining has a long way to go before it comes to an end. A transition from the proof of work (PoW) algorithm to the Proof of Stake (PoS) algorithm is required before reaching ETH2, which is referred to as The Merge. At that moment, the difficulty bomb will go off, essentially shutting down ETH mining and putting the network into an "ice age" that lasts until the switch is completed.

After the switch to proof-of-stake, however, ETH will no longer be mined; instead, transactions will be validated by staking on special nodes.

Presently, the network's hash rate has increased past one petahash. The number is equivalent to around 1,000 TH/s and indicates that the network's hash rate has risen more than 66,000% since March 2016, when it began being recorded on the network.

As reported by Cointelegraph, the Ethereum Foundation criticized the branding of Eth2, saying it did not adequately reflect what was going on with the network during its round of upgrades. "ETH2" and the terminology used to distinguish a proof-of-stake chain from a proof-of-work chain may be phased out in the near future, according to the post.

Among the reasons for the shift are a bad mental model for first-time users, scam prevention, inclusion, and stake clarity. The switch from a PoW to a PoS consensus mechanism is scheduled to occur in the second or third quarter of this year.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP