The Bitcoin network has achieved a significant milestone, as its hashrate has reached an all-time high. This indicates the growing security of the world’s first blockchain network. On October 21, the total computing power securing the Bitcoin network hit a record high of 769.8 exahashes per second (EH/s). Data from BitInfoCharts reveals that the hashrate has been steadily increasing since 2021, which can be attributed to advancements in mining hardware such as application-specific integrated circuits (ASICs).
While the rising hashrate is a positive sign for network security, it also means that the cost of mining Bitcoin is increasing. Combined with the block reward reduction from the 2024 Bitcoin halving event, this could lead to miner consolidation among smaller firms. Due to the rising expenses associated with mining a Bitcoin, smaller companies with less efficient mining rigs may become unprofitable and be forced to either shut down or seek locations with lower energy costs.
Nazar Khan, the co-founder and chief operating officer of TeraWulf, emphasized the importance of energy-efficient mining equipment for maintaining profitability after the halving. TeraWulf, the world’s sixth-largest Bitcoin mining company valued at over $670 million, plans to expand its mining operations this year despite the reduction in block rewards.
Interestingly, despite the increasing difficulty of Bitcoin mining, mining firms have not been selling their Bitcoin holdings. 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. This suggests that miners are holding onto their Bitcoin rather than immediately selling it.
After the Bitcoin halving in May, there was some consolidation among miners, leading to a decrease in the network’s hashrate to a two-month low of 575 EH/s. This decline was attributed to miners shutting down unprofitable rigs.
Overall, the Bitcoin network’s hashrate reaching an all-time high demonstrates its growing security, but it also presents challenges for smaller miners. Nevertheless, the industry continues to evolve, with larger mining companies like TeraWulf expanding their operations and miners holding onto their Bitcoin assets.