2020 has been a good year for Ethereum: its price increased month after month, and its technological security is at a new peak now that its total hash rate is at ATH levels.
The Ethereum hash rate is above 250 Terahashes per second for the first time in its history. This new record comes after an almost uninterrupted growth of 80% since January of 2020.
A Steady Race to the Moon
According to Glassnode, the recent influx of new miners seems to be caused by the rapid growth of the DeFi industry and the record-breaking fees associated with the increase in blockchain activity.
🚨 #Ethereum hash rate hits an ATH.
Ethereum miners have pushed the hash rate to a new record high in the wake of the #DeFi hype and surging fees.
It crossed 250T/s and is now up 80% since the beginning of the year.
— glassnode (@glassnode) October 6, 2020
And they’re probably right. During September, the activity was so much that miners earned more than $166 million in fees for transactions uploaded to the blockchain alone. The intensity of DeFi activity led Ethereum to break transaction records similar to those achieved when CryptoKitties was at its peak.
Currently, transaction fees on Ethereum are down more than 80% from the ATH of mid-September. However, they are still above the average of previous years – including 2017, when the ICOs threatened to choke the network.
Ethereum’s previous hash rate peaked at approximately 246 terahashes per second. This happened on August 9, 2018. Ethereum started 2020 with a hashrate of almost 144 terahashes per second. In August, it was already near 200 terahashes per second, and by the end of September it was already flirting with the previous ATH.
Why is Hash Rate Important for Ethereum and The Rest of Us?
A higher hash rate means that there are more miners involved in securing the network. This means good news not only for the blockchain economy but also for the blockchain’s intrinsic security. A higher hash rate makes a 51% attack more difficult to execute.
By way of comparison, it is worth highlighting the experience of Ethereum Classic. The “original Ethereum” has recently suffered several 51% attacks, diminishing user confidence in its native token ETC to the point where service providers recommended to wait several hours to confirm a transaction as valid, which is counter-productive.
The team has disabled trading of Ethereum Classic. The chain has seen its third 51% attack in the last month and while it hasn’t affected our platform we want to ensure the safety of our customers.
— Sequoir (@sequoirx) August 30, 2020
But Ethereum is not the only blockchain that has aroused the interest of the industry. Recently, Bitcoin set a new record regarding the number of active addresses. Ethereum also had a record in adoption as Metamask registered over 1 million monthly users which is a 400% growth compared to last year.
This is a sign that in times of pandemic, economic uncertainty, and quantitative easing, people are looking at the more positive side of cryptocurrencies and using them as a means of payment, investment, and speculation.