Bitcoin’s hashrate has broken all records, rising to 120 quintillion calculations a second (petahashes) for the first time ever.
That makes it a three fold increase for this year, up from 40 petahashes in February 2019 to now 120.
Part of this increase is due to advancements in asics manufacturing, but it also suggests rising demand as it is growing considerably.
Demand might be coming even from certain isolated governments as they might calculate the easiest way to get bitcoin – and thus bypass the banking system – is to simply mine it.
If demand comes from new miners who intend to use bitcoin rather than sell it, then this might affect the supply of bitcoin on price markets.
That’s because industrial miners tend to see it as a simple operation of using bitcoin proceeds to cover costs and hopefully some profit, adding downwards pressure in the process.
While demand based miners might produce bitcoin even at a cost because they might simply need or want it, so squeezing up a bit industrial miners in the process and thus potentially creating some upwards pressure.
That’s amidst certain geopolitical tensions as well as a warning by the World Bank that debt is getting out of hand. They say:
“There were three historical waves of debt accumulation: 1970-89, 1990-2001, and 2002-09. Since 2010, another wave has been building.
In 2018, global debt reached a record high of about 230 percent of global GDP in 2018 and total emerging and developing economies (EMDEs) debt reached an all-time high of almost 170 percent of GDP, an increase of 54 percentage points of GDP since 2010.
The debt buildup in EMDEs in the fourth wave has already been larger, faster, and broader-based than in any of the previous three waves.”
This global accumulation of all time high debt levels is likely to lead to “widespread financial crises that coincide with global recessions or downturns.”
That’s because at some point people or governments borrow too much to the point they can’t afford to pay it back, leading to mass defaults and thus a mass burning of money due to the way money is created.
As there is at that point less money going around, there is less economic activity, with the left then arguing the government should step in to stimulate the economy, while the right argues companies or people should just be left to go under to realign economic mal-investments and so strengthen the economy.
The problem for the left is that interest rates are very low or negative, with inflation in developing economies now averaging around 3%, down from 25% in the 90s.
The problem for the right is that without some cushion there might be revolts which could exacerbate crisis.
The solution does not have an easy answer, but bitcoin is a potential escape route due to its fixed and unchangeable supply.
That makes it a three fold increase for this year, up […]