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Bitcoin‘s hash rate broke a record on December 25th, reaching 544 exahash per second (EH/s), indicating a significant increase of 130% since January when it was at 253 EH/s. The rise in hash rate coincides with Bitcoin’s price rapidly increasing by over 150% in 2023. Although this seems like a positive development, it also brings additional challenges for miners.
Bitcoin Hash Rate
The increasing hash rate is a critical indicator of network security and efficiency but has also increased the pressure on miners who are already grappling with a decline in profitability. The hash price, an important profitability metric, has decreased from its recent high of $0.136 to $0.09 per daily terahash according to data compiled by HashrateIndex.
The decline in profitability is primarily due to the continuous high fee pressure in Bitcoin’s memory pools and the accumulation of unconfirmed transactions. This congestion, which has been ongoing for almost a year, not only increases costs for miners but may also lead to higher transaction fees for users.
While transaction fees occasionally spike during periods of high demand, the ongoing memory pool congestion remains a significant concern for both miners and users. As Bitcoin continues to climb higher, addressing these scalability challenges is vital for maintaining the health of the network.
Warning from Glassnode Analyst
Additionally, Glassnode analyst Checkmatey stated that Bitcoin has been struggling with constant memory pool congestion for almost a year and has been under continuous high fee pressure since February. However, miner fee revenue is reaching almost all-time highs, reflecting peaks in hash rate and difficulty. The analyst emphasized that despite the prolonged memory congestion, Bitcoin’s fundamentals remain strong. The hash rate and record difficulty levels underscore that the network is as secure, safe, and robust as ever.
The upcoming halving event could exacerbate difficulties for miners and reduce rewards from the current 6.25 to 3.125. However, experts predict that Bitcoin’s halving could later alleviate the rapidly increasing mining difficulties. Additionally, the rising hash rate indicates increased network security and could potentially push BTC‘s price towards a bull market.
