- Ethereum’s hash rate recently hit a new ATH, likely as a consequence of the growing interest in DeFi.
- Increased DeFi activity led to the surge of ETH fees, which attracted more miners, and improved security.
- Another consequence is the growing interest in the crypto industry which allowed multiple projects to benefit.
As the DeFi craze continued throughout the year, Ethereum saw new records in volume, the number of transactions, and even the size of its fees. With Ethereum 2.0 still being in the works, miners are taking every chance they can get to earn some ETH. This opportunity brought many new miners to the Ethereum network. So, as Ethereum fees continue to grow, so does its hash rate.
Ethereum’s hash rate sets a new record
Ethereum has seen a record-breaking amount of activity in 2020. In fact, it has had so much activity, that it is barely handling it, which once again stressed the importance of coming up with a scaling solution.
On the plus side, the surge in hash rate , which has recently hit a new ATH, also improved the project’s security.
According to recent data, Ethereum’s hash rate has exceeded 250 Terahashes per second, which is the highest it has ever been. In fact, its hash rate skyrocketed by around 80% since January of this year.
Glassnode reported that the surge in the number of miners, and thus in Ethereum’s hash rate, comes as a consequence of the growth of DeFi. In September, when DeFi hit its peak, Ethereum miners were estimated to have earned more than $166 million in transaction fees.
The last time Ethereum’s miners saw levels anywhere near this was back when its most popular dApp, CryptoKitties, was at its peak. However, since reaching this high, transaction fees have dropped significantly — by around 80%. Even so, they are still above average for this time of year.
Benefits of the higher hash rate
As mentioned, a higher hash rate does have its positive sides. Ethereum’s security increases with the higher hash rate, as it becomes next to impossible to conduct 51% attacks. One such attack was conducted quite recently on Ethereum Classic, which led to reduced confidence in its token, ETC.
On top of that, a growing number of miners is a good thing for the blockchain economy, as a whole. It awakens greater interest in the crypto industry, and that even led to the success of other cryptos. Bitcoin, for example, has set a new record regarding the number of active addresses quite recently.
Not to mention that the Ethereum wallet, MetaMask, recently surpassed 1 million monthly users.