The world’s first blockchain network, Bitcoin, has reached a new milestone in terms of its hashrate, demonstrating its growing security. On October 21st, the Bitcoin network’s total computing power, known as the hashrate, reached an all-time high of 769.8 exahashes per second (EH/s). This upward trend in the hashrate has been consistent since 2021, as shown by data from BitInfoCharts. The increase in the hashrate can be attributed to advancements in mining hardware, specifically application-specific integrated circuits (ASICs).
While the rising hashrate is indicative of the network’s enhanced security, it also means that the cost of mining Bitcoin is increasing. Combined with the block reward reduction resulting from the 2024 Bitcoin halving event, this could lead to consolidation among smaller mining firms. These firms, with less efficient mining rigs, may become unprofitable and may need to shut down or relocate to areas with lower energy costs.
To remain profitable after the halving, miners will need to invest in energy-efficient mining equipment. Nazar Khan, the co-founder and chief operating officer of TeraWulf, the world’s sixth-largest Bitcoin mining company valued at over $670 million, emphasized the importance of energy efficiency in an interview with Cointelegraph. Despite the block reward reduction, TeraWulf plans to expand its mining operations this year.
Interestingly, despite the increasing difficulty of Bitcoin mining, mining firms have not significantly increased their Bitcoin selling. According to data from CryptoQuant, on October 20th, mining firms sent a total of 2,916 BTC to centralized cryptocurrency exchanges (CEXs), marking one of the lowest selling days in the past 30 days. This suggests that miners are holding onto their Bitcoin rather than immediately selling it.
After the Bitcoin halving in May, there was some consolidation among miners, resulting in a decline in the network’s hashrate to a two-month low of 575 EH/s. This drop was attributed to miners shutting down unprofitable rigs, as explained by James Butterfill, the head of research at CoinShares.
In conclusion, the Bitcoin network’s hashrate has reached a new record high, indicating increased security. However, this also means higher mining costs and potential consolidation among smaller mining firms. Despite these challenges, miners are holding onto their Bitcoin, and the industry continues to evolve and expand.