Bitcoin Network Hashrate Reaches New Record High
Date: 2024-09-04 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Bitcoin network hashrate — the total computing power that secures the Bitcoin network — hit a new record on September 1, 2024, surpassing 742 exahashes per second (EH/s).
According to CryptoQuant, the hashrate has been steadily increasing since 2021, which makes sense given the constant upgrades to mining hardware like application-specific integrated circuits (ASICs).
As the hashrate increases, so does the cost of Bitcoin mining, as miners are forced to upgrade hardware, expand operations, and use more power to remain competitive.
Mining Industry Economics
The rising hashrate and corresponding high difficulty levels continue to put pressure on miner revenues. August 2024 was the worst month for mining profitability since September 2023, when revenue fell to $827.56 million.
The financial difficulties faced by miners were also documented in a recent report from JP Morgan, which found that miners are experiencing a decline in revenue due to several factors, including a decrease in block subsidies and rising energy costs.
According to the report, of the five Bitcoin mining companies analyzed, MARA and Riot Platforms had the highest costs to mine one Bitcoin, at approximately $55,700 and $62,000, respectively.
These high costs and declining revenues are forcing mining companies to consider various options to increase revenue and stay in business. Many companies are moving from issuing corporate debt to offering equity to investors to avoid high debt-to-equity ratios.
Other mining companies are considering diversifying into AI and high-performance computing to offset losses in mining revenue, dedicating at least some of their computing power and physical facilities to data centers.
Renewable Energy as a Way to Reduce Costs?
Companies like MARA (formerly Marathon Digital) are also exploring renewable energy to stay competitive in the challenging mining environment. MARA has experimented with landfill gas-to-power systems that convert methane from landfills into usable energy.
The mining giant has also signed a deal with the Kenyan government to develop renewable energy infrastructure in the country, indicating that the company may be moving toward more sustainable energy sources.
