Bitcoin’s hash rate, a measure of network power, hit its zenith this week, which, according to Max Keiser, could signify the beginning of the end for fiat.
Bitcoin’s hash rate has annexed approximately 60% to its total hash rate since the halving in May, climbing from a seven-day simple moving average of 90 exahashes per second (EH/s) to a record high of 144.8 (EH/s) on October 14th.
Zero to Hero
This year’s hashing lull came shortly after Bitcoin’s quadrennial halving as retail miners capitulated in the face of waning margins. But that didn’t deter network participants. Soon Bitcoin’s hash rate bounced back and now appears healthier than ever. And that could be a prelude to further price action.
The theory goes that since the higher the hash rate, the more secure the network becomes, and thus, the more confidence investors and miners have in Bitcoin – a point that Bitcoin bull and broadcaster Max Keiser has been arguing for the better half of a decade. Keiser told the BTC Times:
Price follows hash rate. Price is a lagging indicator for the BTC protocol.
For Keiser, however, Bitcoin’s ever trending hash rate isn’t just a health metric or price barometer; it’s a measure of adoption and increasing disillusion with the financial system.
“Price only tells you how badly fiat money is doing in the world, hash rate tells you how much of the available global energy Bitcoin is using,” he explains. “As we head toward hyperbitcoinization, price becomes immaterial because there will no longer be any fiat left to price BTC against and Gold will get marginalized.”
Keiser maintains that Bitcoin’s global energy use – which he estimates around 1% – will likely continue its steady climb until Bitcoin becomes “the dominant user of all the available energy in the world.”
While Bitcoin’s domination of global energy reserves is likely a while off, there may be some credence to Keiser’s forecast.
Underpinning Bitcoin’s hash rate ascent has been news of entire countries encouraging the mining sector, luring businesses in with rock bottom electricity tariffs and government initiatives.
In September, Kazakhstan proposed expanding its crypto mining sector with a $715 million investment in a bid to transform the country into a Bitcoin mining hub. Just weeks later, Iran made a similar move to ramp up its revenue by auctioning surplus energy exclusively to Bitcoin miners.
“The BTC protocol has an insatiable hunger for energy and this is what backs BTC. Not energy itself, but the underlying design factor hard-coded into the Genesis block that guarantees every other form of money; all fiat, all alt coins, and even Gold itself, will get crowded out and starved of energy,” said Keiser.
And, according to Keiser, fiat’s demise isn’t the only calamity Bitcoin hedges against.
Additionally, Rogue AI will also get starved critical energy. BTC is our stalwart against an AI takeover of our species.
If saving the world from self-aware AI doesn’t incentivize Bitcoin miners, nothing will.