Key facts:
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The Bitcoin hash price is at an all-time low of around $0.042.
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The transaction fee rewards that miners receive are insufficient.
The hashrate of bitcoin (BTC) hit a new all-time high today, reaching 715.89 EH/s (exahashes per second). This comes at a time when the profitability of bitcoin Mining is at an all-time low, which has consequences for mining activity.
The increase in this rate implies for miners a need for more power to solve a block, which is equivalent to Greater competition between them to carry out their tasks on the network. This sustained rise in the hashprice until now can appreciate in the following graph provided by the MemPool platform.
Bitcoin hash price increase over the years to date. Source: MemPool.
It is also important to mention here that the higher this measurement is, the more secure the Bitcoin network is. This is because the contribution of miners’ work offers more computing power, making it harder for the network to fall victim to an attack. What is disadvantageous to miners on the one hand, favors the network and its users on the other.
This news comes at a complex juncture for miners, since, as stated reported CryptoNews, Bitcoin mining parameters are going through a bad moment and these converge to a decline in profits in this activity.
Variables that are affecting Bitcoin miners
Initially, it is worth remembering that this year, after the halving in April 2024, the reward that miners receive for processing information on the network was halved (3,215 BTC).
Secondly, from August 29, 2024, the hashprice, a metric that evaluates miners’ income per unit of hash, will be maintains at historic lows of around $0.042. At this rate level, each hash produces 70 sats, the minimum unit of bitcoin.
In addition, the miners’ income from transaction fees, which are currently around 0.049 BTC per block, represents about $2,800, which is insufficient to sustain this task.
Finally, the volatility of the Bitcoin price is another aggravating factor that negatively impacts the profits obtained by miners.
Thus, all these measurements together with the new ATH of the hashrate result in greater complexity for the profitability of bitcoin mining.
How does the increase in hashrate affect Bitcoin miners?
The hashrate expresses the number of hash calculations that miners are performing per second. In turn, Evaluates the computing power used in the Bitcoin network to execute transactions and ensure its proper functioning by means of the mining.
A higher hashrate means that many miners are contributing their work to the network. As this rate grows, so does the competition between miners, as they will require more processing power to solve a block.
This affects the profitability of miners, as they will face greater difficulty in the network to sustain activity by competing with each other. At the same time, block rewards decreased until the next halving (2028) and the price of bitcoin, thanks to its long lateralization, does not end up compensating for the network’s mining costs.
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