Bitcoin: the hashrate reaches a new historic summit

The Bitcoin network continues to surprise. While analysts expected a slowdown in the hashrate after the halving of April 2024, the computing power mobilized by mining companies has just reached a historic record of 833 exams per second (EH/S), up 9 % in a few days. This rise in power is explained by the massive investments of mining companies, which anticipated the reduction of the awards into blocks by strengthening their infrastructure. However, a contrast surprises: despite a course that oscillates around 100,000 dollars, the transaction costs reached historically low levels, which weakens the profitability of mining companies and triggers questions about the economic balance of the network.

A futuristic minor at the top of a mountain of Bitcoin circuits, symbolizing the record climb of the hashrate!

Hashrate growth carried by massive investments

Glassnod data confirm a continuous increase in the Bitcoin hashrate in recent months, which reflects a constant strengthening of the computing power that secures the network. This development is explained by massive institutional investments, especially in the purchase of new mining equipment. As April 2024 Halving approaches, many specialized companies have strengthened their infrastructure in order to maintain their competitiveness in the face of reducing block awards.

However, this dynamic seems to mark a major turn. After a peak in pre-order equipment upstream of the halving, orders are starting to slow down, which suggests a possible shortness of breath Hashrate growth. At the same time, operational costs are increasing, in particular under the effect of the planned increase in the mining difficulty by 6 % in the coming days. This new progression will further complicate the situation of the least efficient mining companies, already faced with a drop in income from transaction costs and an increasingly competitive environment.

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A market under tension between low profitability and pressure on mining companies

The increase in the hashrate is accompanied by a historic fall in transaction costs, a phenomenon that questions the profitability of mining companies. Currently, the cost of a priority transaction fell to only $ 0.69 (5 SAT/VB), a level rarely reached in recent years. This decrease is explained by a limited congestion of mempool, which reduces the competition for the inclusion of transactions in the blocks. Consequently, although the network calculation power reaches records, the income of mining companies from transaction costs remain at their lowest level, which puts under pressure the most vulnerable actors.

This situation reveals a structural flaw in the economic model of Bitcoin. As mining awards decrease after each halving, minors must count more on transaction costs to ensure their profitability. However, the current trend shows that this transition is struggling to take place. If operational costs, especially those related to energy and equipment, continue to increase, certain mining companies may no longer be able to cover their expenses. A wave of closures would then lead to a gradual reduction in network power, which can affect its safety and resilience to potential attacks.

The rapid boom in the hashrate confirms that Bitcoin mining has become an ultra-competitive industry, supported by massive investments. However, the drop in income related to the transaction costs and the imminent increase in the difficulty of mining may upset the balance of the sector. If profitability continues to erode, the least efficient mining companies could be forced to stop their activities, which would leave more room for major industrial infrastructure. This consolidation would accentuate the centralization of mining, which would raise challenges on decentralization and safety of the network. The next market adjustments and the difficulty of mining operations will be decisive to measure the resilience of actors in the face of these new economic constraints.

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