On Christmas Day, the Bitcoin network's computing power, also known as the mining hash rate, reached a record high of 544 exahashes per second (EH/s), as reported by Blockchain.com. This peak was corroborated by Bitinfocharts, which observed significant increases in average hash rate over the weekend. Since January of this year, the network hash rate has shown a remarkable increase, more than doubling with a 130% rise.
In contrast to the soaring hash rate, Bitcoin's price movement was relatively stagnant, showing a modest increase of over 150% since the beginning of 2023. Will Clemente, co-founder of Reflexivity Research, analyzed the hash rate on a logarithmic scale and remarked on the resilience of Bitcoin's network. He noted that the mining ban in China during the summer of 2021 was merely a temporary setback, highlighting the strength of what he considers the most secure and decentralized open-source currency network on Earth.
Despite the theoretical advantages of a high computing power for price models, such as implied hash-adjusted prices, this development presents challenges for miners. The increased difficulty in mining the next block due to the heightened computing power translates into reduced profitability for them.
The profitability for miners, measured by hash prices, has seen a decline over the past week. This downturn follows the cooling of the recent BRC-20 serial number inscription trend. HashrateIndex reports that hash prices are currently at about $0.09 per terahash per day, a significant drop of 34% from the year's peak of $0.136/TH/s/day on December 17. Hash prices typically surge during periods of high demand, which lead to increased transaction fees, as observed during the recent Inscription craze.
Glassnode analyst "Checkmatey" pointed out the growing pressure on fees in the Bitcoin mempool, which has been rising since February. The Bitcoin mempool, a collection of unconfirmed transactions waiting to be added to a block, has been nearing a full year without a complete clearing. This buildup reflects the ongoing challenges and complexities within the Bitcoin network, especially for miners navigating the changing landscape of profitability and network demands.
