Over the weekend Bitcoin price suffered yet another big drop that would have shaken weak hands, but those battle-hardened hodlers would have scoffed at the paltry 29 percent drop. However, under the surface, Bitcoin’s alarm bells were close to sounding as the hash rate fell to around 50 percent.
Bitcoin showed signs of its potential for triggering this dynamic over the weekend.
This metric if performance measurements for a coin like Bitcoin is vital, especially when the reason for its drop was a direct competitor taking the limelight. Bitcoin Cash rocketed up its own value, reaching as high as $2,500, but it also sapped a lot of the hash power of Bitcoin.
The danger of losing a large amount of hashing power for Bitcoin is that it could trigger a chain death spiral. Many feel that as a market, there is nothing that can stop Bitcoin, but that is a surface-view under the hood, things are a little more fragile.
Chain death spiral
As terrifying as the name sounds, what exactly is a ‘chain death spiral?’
The Bitcoin network currently adds a new bundle of transactions, known as a “block,” roughly every 10 minutes. The exact time is determined by how long it takes for a miner to process a block of transactions. This, in turn, is set by something called the “difficulty” on the network…