Bitcoin Miners Face Losses Despite Record Hashrate
Date: 2023-12-27 Author: Dima Zakharov Categories: IN WORLD
Bitcoin's Hashrate Reaches Record High
On December 26, the Bitcoin (BTC) network achieved a new historical high in its hash rate. However, mining profitability on the blockchain of the leading cryptocurrency has started to decline.
According to Blockchain.com, BTC's hash rate currently stands at an impressive 544 EH/s. Just two days earlier, on December 24, it had reached 528 EH/s. The hash rate represents the amount of computational power used per second. An increase in this metric indicates increased mining activity as miners expand their operations to enhance profits.
Total Growth
Throughout this year, BTC's hash rate has surged by 130%. In early January, the hash rate barely exceeded 250 EH/s, according to Blockchain.com.
Simultaneously, the price of Bitcoin has also risen significantly. Over the last 12 months, the cryptocurrency's price has surged by 153.3%, trading at $42,729 at the time of writing, according to CoinGecko.
Record Hashrate and Mining Difficulty
The hash rate's record high coincided with a significant increase in mining difficulty. As per BTC.com, during the last adjustment on December 23, the difficulty reached 72.01 T. It is expected to rise to 73.91 T on January 5.
Declining Mining Profitability
Will Clemente, co-founder of the analytical platform Reflexivity Research, explained that while a high hash rate might be favorable for theoretical price models, it isn't good news for miners. They now need to exert more effort to secure the next block.
Mining profitability on the BTC network has dropped by 34% in the last month, declining from $0.136/TH/s/day to $0.09/TH/s/day. According to Glassnode, this decline is linked to elevated transaction fees.
Last week, transaction fees on Bitcoin's blockchain skyrocketed to $40, adding to the challenges faced by miners.
