The hashrate of the Bitcoin network has reached a historic high, indicating the increasing security of the world’s first blockchain network. On October 21, the total computing power securing the Bitcoin network hit a record-breaking 769.8 exahashes per second (EH/s). Data from BitInfoCharts shows that the hashrate has been steadily increasing since 2021, which is closely linked to advancements in mining hardware such as application-specific integrated circuits (ASICs).
While the rising hashrate is a positive sign for the network’s security, it also means that the cost of mining Bitcoin (BTC) is rising. This, combined with the upcoming block reward reduction from the 2024 Bitcoin halving, could lead to consolidation among smaller mining firms. As the cost of mining a Bitcoin increases, less efficient firms with outdated rigs may become unprofitable and be forced to shut down or relocate to areas with lower energy costs.
To remain profitable after the halving, miners need energy-efficient equipment. Nazar Khan, the co-founder and COO 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, Khan stated that energy-efficient mining equipment is crucial for miners to maintain profitability.
Despite the growing difficulty of Bitcoin mining, mining firms have not significantly increased their selling of Bitcoin. On October 20, mining firms sent only 2,916 BTC to centralized cryptocurrency exchanges (CEXs), marking one of the lowest days of selling in the past 30 days, according to data from CryptoQuant. This suggests that miners are holding onto their Bitcoin rather than selling it.
After the Bitcoin halving in May, some consolidation among miners was observed as the network’s hashrate dropped to a two-month low of 575 EH/s. This decrease was attributed to miners shutting down unprofitable rigs, as explained by James Butterfill, the head of research at CoinShares.
In conclusion, the Bitcoin hashrate has reached a new all-time high, reflecting the network’s growing security. However, this also means that the cost of mining Bitcoin is increasing, which could lead to consolidation among smaller mining firms. Despite the rising difficulty, miners have not significantly increased their selling of Bitcoin.