The computing power of the Bitcoin network has returned to the threshold of 1 zettahash per second, its highest level in almost seven months. This rebound strengthens the security of the protocol, but it also heralds a further increase in difficulty which could reduce the income of the least competitive mining companies.
In brief
- Bitcoin’s hashrate exceeds 1 zettahash per second, its highest level in almost seven months.
- This increase strengthens network security, but increases competition between mining companies.
- Mining difficulty increased by 5.92% and could further increase by 5 to 6% at the end of October.
- Despite the conversion of some companies to AI, the computing power of the network continues to grow.
- More efficient machines and low-cost electricity favor the most competitive mining companies.
Bitcoin hashrate returns to 1 zettahash per second
The seven-day average of the Bitcoin hashrate has exceeded 1000 exahashes per second, or 1 zettahash per second. This computing power had not been observed since March 3, according to data cited by BlocksBridge Consulting.
The hashrate measures the number of calculations that machines devote to mining each second. Its rise complicates an attack on the network, because a malicious actor would have to mobilize even greater power to attempt to modify transaction history.
THE main indicators show the extent of the rebound:
- The seven-day average hashrate exceeds 1000 EH/s;
- The difficulty increased by 5.92% on October 16;
- It now reaches 140.58 trillion;
- A further increase of between 5% and 6% remains possible at the end of October;
- The hashprice fluctuates around 37 dollars per PH/s per day;
- Blocks are produced faster than the ten minute goal.
Bitcoin automatically adjusts its difficulty every 2016 blocks, or approximately every two weeks. When more machines join the network, blocks are found faster. The protocol then increases the difficulty in order to reduce their average interval to around ten minutes.
Estimates of the next adjustment remain provisional. They evolve according to the production speed of the last blocks. If the expected increase is confirmed, the difficulty could increase by around 11% over two consecutive periods.
BlocksBridge notes :
This is far from the respite that remaining miners might have hoped for from the AI migration.
Each operator will have to share the same rewards with higher overall computing power.
The shift towards artificial intelligence does not reduce competition
Several listed mining companies have started converting part of their infrastructure into data centers for artificial intelligence and high-performance computing. These activities can offer more predictable contracts than mining, whose income depends on the price of BTC, transaction fees and difficulty.
However, this move did not cause a lasting drop in the hashrate. Private companies, machine manufacturers or operators located in regions where electricity costs less seem to have absorbed the capacity abandoned by certain listed groups.
The improvement of ASICs also contributes to the movement. The new machines produce more calculations for comparable power consumption. The hashrate can therefore progress without requiring a proportional increase in the quantity of energy consumed.
Ki Young Ju, founder of CryptoQuant, estimated that “miners are running at full capacity”. According to him, the industry is gradually leaving a model close to venture capital to become a heavy activity dominated by large companies and institutional investors.
US-listed companies would now control between 35% and 40% of world power. This figure should be treated with caution, however, as the exact origin of the hashrate remains difficult to determine behind the mining pools.
Strengthened security, but still fragile margins
An increase in the hashrate improves Bitcoin’s defenses, but it does not guarantee the profitability of miners. As the difficulty increases, a machine that maintains the same power obtains a lower share of the rewards.
The hashprice, which measures the expected daily income for a unit of calculation, remains close to $37 per petahash. At this level, old equipment or equipment powered by expensive electricity can become loss-making.
Recent models, whose efficiency is around 9 to 12 joules per terahash, have a better margin. Operators must also obtain competitive electricity rates. The exact price that remains profitable depends on hardware, finance costs, cooling and the price of bitcoin.
The return of the hashrate therefore does not mean that all miners are doing better. Above all, it shows that the available power finds new owners or that the most efficient players increase their production. The next increase in difficulty will confirm this trend, but it could also accelerate the exit of the most fragile operators.
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