The Ethereum hash rate has reached an all-time high despite the cryptocurrency’s recent hard fork, dubbed London. It was expected that the London fork would drive miners away from the platform due to lower profits. However, this spike proved otherwise.
According to CoinDesk, it was reported today that Ethereum’s hash rate peaked after the weekend. Etherscan recorded a peak of 715.4 TH/s and OKlink of 663.6 TH/s. However, while both platforms report different numbers, both agree that this is a new record.
This increase in Ethereum’s dedicated performance is quite a surprise, as London limited the gains that miners could make. In short, they ended a fee that miners charged when processing transactions. These fees were determined by algorithms and completely eliminated, resulting in large losses.
In August, about $12,000 worth of ETH was wiped out every minute. According to Dune Analytics, 285,439 ETH worth about $970 million has been wiped out since London came out.
Ethereum is also preparing for a model shift that bypasses miners entirely with Ethereum 2.0. This shift would take place in the not-too-distant future, which is why it’s strange to see miners devoting more and more energy to Ethereum.
Eddie Wang, a researcher at OKLink, said this is due to the high demand for the platform, such as NFT mining.
The rise of NFTs, or non-fungible tokens, would help Ethereum miners cope with the drop in profits since London.
Remember that NFTs are not created like a normal file, even if they are digital in nature. They need to be mined or “embedded” into the Ethereum blockchain. In this way, they become a single copy of a digital file that can be tracked and exchanged like a cryptocurrency, but at a higher price.
This means that one reason for the rise in the hash rate is that NFT creators need miners to mine digital art. Art that fetches very high prices thanks to art collectors.
We will see if miners abandon Ethereum in the future or if they continue to profit from NFTs. Maybe the hash rate will continue to rise thanks to mining, or maybe it will just spike before falling again. Bitcoin recently saw a decline even though it was expected to continue to rise. However, it appears from the charts that the hash rate has increased over time, but who knows?