Bitcoin hashrate hits all-time high, boosting network security

The Bitcoin hashrate has reached a new all-time high, showcasing the growing security of the world’s first blockchain network.

The Bitcoin network hashrate — the total computing power securing the Bitcoin network — reached an all-time high of 769.8 exahashes per second (EH/s) on Oct. 21.

The hashrate has been in a steady uptrend since 2021, BitInfoCharts data shows. The hashrate’s escalation is widely correlated with developments in mining hardware like application-specific integrated circuits (ASICs).

While the Bitcoin hashrate is a sign of the network’s increasing security, it also means that the cost to mine Bitcoin is increasing.

Paired with the block reward reduction from the 2024 Bitcoin halving, the rising hashrate could lead to miner consolidation among smaller firms.

Incoming Bitcoin miner consolidation among smaller firms?

As the price of mining a Bitcoin increases, smaller firms with less efficient mining rigs may become unprofitable, forcing them to close shop or look for headquarters with lower energy costs.

Energy-efficient mining equipment is key for miners to remain profitable after the fourth Bitcoin halving, according to Nazar Khan, co-founder and chief operating officer of TeraWulf.

In an interview with Cointelegraph, Khan said:

“If you are a firm that just owns a bunch of machines and you are not profitable, you will be challenged. If you are a company that owns quality infrastructure that can deliver low-cost power, that’s a real asset, and if anything, the underlying value of that asset [BTC] has increased…”

TeraWulf is the world’s sixth-largest Bitcoin mining company, worth over $670 million, according to Companiesmarketcap. Despite the halving of block rewards, it plans to further expand its mining operations this year.

Bitcoin miners are not selling, yet

Despite the growing Bitcoin mining difficulty, mining firms haven’t increased their Bitcoin selling.

On Oct. 20, Bitcoin mining firms sent a cumulative 2,916 BTC to centralized cryptocurrency exchanges (CEXs), marking the fourth-lowest day of selling in 30 days, according to CryptoQuant data.

Some miner consolidation was seen after the Bitcoin halving on May 10, as the network’s hashrate fell to a two-month low of 575 (EH/s).

James Butterfill, the head of research at CoinShares, attributed May’s drop in hashrate to miners “beginning to turn off unprofitable rigs.”

Source: https://cointelegraph.com/news/bitcoin-hashrate-hits-all-time-high