On Christmas Day, the Bitcoin network achieved a historic milestone with its hash rate surging to an all-time high of 544 exahashes per second (EH/s), as reported by Blockchain.com and Bitinfocharts. Despite this remarkable achievement, miners are grappling with a decline in profitability due to the complex dynamics of the crypto market.
The hash rate, representing the computing power of the Bitcoin network, has more than doubled in 2023, experiencing a 130% increase since January. The surge in hash rate correlates with Bitcoin's price, which has risen over 150% during the same period. Reflexivity Research co-founder Will Clemente noted that the impact of the 2021 China mining ban on the hash rate is minimal when viewed on a logarithmic scale.
While a high hash rate is theoretically positive for models like implied hash-adjusted price, miners are facing increased challenges. The hash price, a key metric indicating profitability, has dropped over the past week, reaching $0.09 per terahashes per second per day, according
to HashrateIndex. This decline, amounting to a 34% reduction since its peak on December 17 at $0.136/TH/s/day, is attributed to the cooldown in the BRC-20 ordinal inscription craze.
The sustained high demand, particularly during inscription frenzies, has kept transaction fees elevated, causing the Bitcoin mempools to remain uncleared for almost a year. Glassnode analyst "Checkmatey" observed the prolonged fee pressure since February.
As Bitcoin's network hash rate continues to reach new heights, miners navigate the evolving landscape, adjusting to challenges in profitability and fee dynamics.