On Christmas day, Bitcoin achieved an unprecedented milestone as its hash rate reached a historic high of 544 exahashes per second (EH/s), according to Blockchain.com data. This surge, corroborated by Bitinfocharts, highlights the network's robustness, more than doubling in 2023 and marking a significant 130% increase since the year's onset.
Synchronization Between Hash Rate and Price
Bitcoin's hash rate surge in 2023 mirrors its price trajectory, surging over 150% since January 1, 2023. This synchronous rise underscores the interdependence between the network's security and market value.
Resilience Amid Adversity
Reflexivity Research co-founder Will Clemente, analyzing the hash rate's logarithmic scale, emphasizes Bitcoin's resilience despite challenges like the 2021 China mining ban. Clemente states, "The summer 2021 China mining ban is barely a blip. Imagine fading the most secure decentralized open-source monetary network on the planet, couldn't be me.
Challenges for Miners
While the hash rate surge strengthens network security, it introduces challenges for miners. With heightened competition for block rewards, miners face the need for increased investment in powerful hardware, potentially eroding profit margins during periods of low profitability.
Declining Hash Price and Profitability
The key metric reflecting Bitcoin mining profitability, hash price, has witnessed a decline over the past week, standing at $0.09 per terahashes per second per day, a 34% decrease from its 2023 high. Cooling trends in BRC-20 ordinal inscription contribute to this decline.
Sustained Fee Pressure
Glassnode analyst "Checkmatey" notes that Bitcoin's mempools have not fully cleared for nearly a year. This sustained backlog of unprocessed transactions leads to elevated fee pressure, impacting users and businesses. The ongoing fee pressure emphasizes the urgent need for scalability solutions to ensure a smoother and more affordable user experience.