Bitcoin Hashrate Surges Amid Network and Price Discrepancy

According to CoinDesk, the Bitcoin blockchain's hashrate is experiencing a significant surge, highlighting a growing disconnect between network activity and the price of its native token, bitcoin (BTC). The hashrate, which measures the computational power needed to mine a block on the Bitcoin blockchain, recently hit an all-time high of 838 exahashes per second (EH/s) on a 14-day moving average. On a 24-hour basis, it spiked to 974 EH/s, marking the second-highest level ever recorded, as per Glassnode data. While short-term measurements can be misleading due to block time variability, longer timeframes provide more reliable insights. In the coming days, Bitcoin's difficulty adjustment, which recalibrates every 2016 blocks to maintain a 10-minute block interval, is expected to increase by over 3%, reaching a new peak. This divergence between the hashrate and bitcoin's price is noteworthy, as the cryptocurrency remains about 25% below its all-time high. Meanwhile, mining costs continue to rise, necessitating a strong bitcoin price, full blocks, and high transaction fees for miners to remain profitable and cover operational expenses and capital expenditures. Miners currently earn revenue through block rewards, which stand at 3.125 BTC per block in the current epoch, and transaction fees. However, transaction fees are notably low, averaging around 4 BTC per day, or approximately $377,634. As bitcoin's block subsidy continues to halve every four years, sustained or increasing transaction activity will be crucial to maintaining mining incentives. Recently, developer Mononaut from Mempool observed that Foundry USA Pool mined the emptiest "non-empty" block in over two years, containing just seven transactions. This rarity was only surpassed by a block with four transactions back in January 2023. The rising hashrate suggests a booming network, yet the near-empty blocks present a scenario akin to a powerful train speeding down the tracks without passengers. This situation raises concerns for Nicolas Gregory, creator of the Mercury Layer and a former Nasdaq Board Director. Gregory expressed that half-empty bitcoin blocks tell a cautionary tale, warning that focusing solely on bitcoin as a store of value could jeopardize its future. He emphasized the importance of using bitcoin for real commerce, stating, "If we don’t get people using bitcoin for real commerce, it’s game over."