The rise of Ethereum over the past year has made mining activity on its network more attractive, with its hash rate setting a new high.
On Friday, January 28, Ethereum’s hash rate hit a new all-time high of 1.1PH/s, according to data from Glassnode, just two weeks after hitting its previous all-time high of 1.08PH/s.
The crypto mining hash rate is a measure of the computing power needed to verify transactions and add new blocks to a Proof-of-Work (PoW) blockchain. Ethereum, like Bitcoin, uses proof-of-work consensus, which has received increased attention due to the amount of energy it requires to operate.
Generally, a rise in the mining hash rate means that additional computing power has joined the network to make it more decentralized and secure. A drop in this same metric indicates that fewer nodes are online, which typically impacts network speed and security.
Ethereum’s Inevitable Shift to Proof-of-Stake
For now, the days of Ethereum mining are far from over. Although the ETH network has been planning to move to Proof of Stake (PoS)-style consensus for some time now, it doesn’t seem like it’s going to happen anytime soon.
Indeed, last December, the network implemented the Arrow Glacier upgrade, pushing back the timeline even further for the network’s early move to proof-of-stake consensus. Thus, its hash rate will likely reach a new all-time high when new nodes join the network.
However, the switch to PoS consensus is inevitable for Ethereum, regardless of further delays, as it will remove the requirement to mine ETH and allow transactions to be validated through the establishment of special nodes. Ultimately, this will scale the entire process and build a secure network at lower gas costs.
For years, this update has been touted as the solution to the countless issues plaguing the network. And as Ethereum steadily loses its market share in the DeFi and NFT sectors to faster and cheaper alternatives, it becomes necessary to address its scalability issues.
That said, switching from proof-of-work to proof-of-stake also means mining stops. Indeed, PoS networks only require validators who place tokens in “staking” to confirm transactions. Although this method has several advantages, some consider that it is not decentralized enough.
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