Bitcoin miners are having a tough time, especially since last month’s halving event slashed block rewards, and now hashrates are climbing again.
On May 29, Luxor Technology’s HashRateIndex reported that Bitcoin’s seven-day hashrate had hit an all-time high of 659 exahashes per second (EH/s) This represents a 13.6% increase from its post-halving low of 580 EH/s, it added.
Moreover, the average network hashrate hit an all-time high of 732 EH/s over the weekend, according to Bitinfocharts.
This surge in network horsepower means more pain for Bitcoin miners as each block becomes harder and more competitive to mine. On the upside, high hashrates mean high network security for the Bitcoin blockchain.
Bitcoin Mining Competition Intensifies
HashRateIndex explained that the hashrate growth could indicate that public Bitcoin miners are energizing their ASIC orders on schedule. This means more powerful hardware is being switched on, adding to the competition as more hash power comes online.
The current average block time is a blistering 9 minutes and 26 seconds, it added. The top public miners have had 76.6 EH/s worth of equipment on order for 2024. Additionally, 12.9 EH/s of that should have been delivered in Q1, and nearly 36 EH/s of it should have been delivered in Q2, stated HashRateIndex which added:
“Regardless of where it’s coming from, the current surge in hashrate is going to smack miners with a hefty upward difficulty adjustment in about 8 days.”
The platform estimated that the difficulty adjustment will be +5.97%. Difficulty is a measure of competitiveness among miners on the network. It is currently 84.38T after falling from an all-time high of 88.1T earlier this month. Another upward adjustment will mean more pain for miners.
“If Bitcoin’s price stays steady, the next adjustment will likely drive hashprice back below $50/PH/Day,” it added.
Hashprice is a measure of how much a miner can expect to earn from a specific quantity of hash rate.
Hashprice Slumps
Hashprice is currently just $53 per petahash per second per day and has fallen 46% since the beginning of the year.
Hashprices surged to $400/PH/s/day during the crypto market cycle peak in 2021 but have slumped 87% as mining profits dwindle amid increasing competition, energy and hardware costs, and network hashrates.
This has forced large mining companies to seek out cheaper energy in countries in Africa and Scandinavia.