Bitcoin’s Hash Rate Hits Record High, Bringing Challenges for Miners

As Bitcoin’s hash rate hits a historic 544 exahashes per second (EH/s) on December 25, a staggering 130% increase since January, network security and efficiency skyrocket.

A key measure of network health, Bitcoin’s hash rate has increased by 130% in 2023 and hit a record-breaking 544 EH/s on December 25. This growth is consistent with the over 150% price boom of Bitcoin within the same time frame, suggesting strong network efficiency and security.

But the rising hash rate makes things more difficult for miners, especially when it comes to making money. From its recent high of $0.136 on December 17, the hash price—a crucial indicator of profitability—has dropped to $0.09 per terahashes per second per day. The reason for this decrease is because Bitcoin’s mempools are experiencing persistently high fee pressure, which is creating a backlog of unconfirmed transactions and raising user transaction costs.

Scalability Challenges and Mempool Congestion

Since February, Bitcoin has been dealing with persistent mempool congestion for over a full year, with high fee pressure. Users’ transaction fees increase as a result of this congestion, in addition to the expenses for miners. Although transient surges in transaction costs are typical in times of heavy demand, the ongoing mempool congestion worries users and miners alike.

Experts are nonetheless upbeat about the fundamentals of Bitcoin in spite of these difficulties. With miner fee revenue approaching all-time highs, Glassnode analyst “Checkmatey” highlighted that Bitcoin’s fundamentals are still robust. The expert pointed out that it has been almost a full year since Bitcoin’s mempools were cleared, indicating persistently strong fee pressure since February. The network is safe and strong, as evidenced by its record-breaking hash rate and difficulty.

Miners may have difficulties as Bitcoin gets closer to its impending halving event since payouts are expected to drop from 6.25 to 3.125. Experts do, however, believe that the halving may eventually lessen the quickly increasing mining difficulty. Increased network security is indicated by the increased hash rate, which might lead to a bull market for Bitcoin.