On Christmas Day, the Bitcoin network’s computing power, or mining hash rate, reached a new record high, signifying both the network’s growing strength and the increasing challenges faced by miners due to declining profitability.
On December 25, the hash rate of Bitcoin soared to an unprecedented 544 exahashes per second (EH/s), as reported by Blockchain.com and confirmed by Bitinfocharts, which noted a peak in the average hash rate over the weekend.
This surge in hash rate represents a significant increase, more than doubling since January 2023, with a 130% rise. Interestingly, Bitcoin’s price trajectory has closely followed this trend, showing an increase of over 150% since the start of the year. Will Clemente, co-founder of Reflexivity Research, highlighted the resilience of Bitcoin’s network, especially post the 2021 China mining ban, underscoring the robustness of this decentralized monetary network.
However, a high hash rate, while theoretically beneficial for price models like the implied hash-adjusted price, poses challenges for miners. As the hash rate climbs, miners face greater difficulty in securing the next block, impacting their profitability.
The hash price, which is a measure of mining profitability, has seen a decline over the past week. This drop is partly attributed to the cooling of the BRC-20 ordinal inscription craze. Currently, the hash price stands at about $0.09 per terahash per second per day, as per HashrateIndex. This figure represents a 34% decrease from the year’s high of $0.136/TH/s/day on December 17. Hash price typically spikes during periods of high demand, leading to elevated transaction fees, as was observed during the recent inscriptions frenzy.
Glassnode analyst “Checkmatey” pointed out that the Bitcoin mempools have not been fully cleared for almost a year, indicating sustained fee pressure since February.
The milestone of surpassing 500 EH/s was first achieved in late November, marking a significant moment in the network’s history. This ongoing development in the Bitcoin network reflects its growing security and computational power but also highlights the evolving landscape of mining economics, where increased competition and network strength may not always align with individual miner profitability.
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