The hashrate of the Bitcoin blockchain is experiencing a significant rise, highlighting an increasing disconnect between overall network activity and the market value of bitcoin (BTC).
As measured on a 14-day moving average, the hashrate—which indicates the computing power necessary to mine a block on the proof-of-work Bitcoin blockchain—recently hit a record high of 838 exahashes per second (EH/s). Within a 24-hour period, it surged to 974 EH/s, marking the second highest level ever recorded.
However, relying on a 24-hour measurement can be somewhat misleading because of fluctuations in block time; therefore, longer-term data tends to offer clearer insights. In just two days, a difficulty adjustment for Bitcoin—occurring every 2016 blocks to ensure a 10-minute block time—is anticipated to increase by more than 3%, setting a new record.
This notable gap between the hashrate and Bitcoin’s price is concerning. Although Bitcoin’s value is roughly 25% lower than its all-time high, mining expenses are on the rise. For miners to remain profitable and manage operating costs as well as capital expenditures, a robust Bitcoin price, fully-filled blocks, and elevated transaction fees are critical.
Currently, miners generate income through two means: block rewards (which are 3.125 BTC per block in the ongoing epoch) and transaction fees. Yet, transaction fees are exceedingly low—averaging about 4 BTC per day, equivalent to roughly $377,634. As the block subsidy for Bitcoin halves every four years, maintaining or improving transaction activity will be vital for sustaining miner incentives.
Sparse blocks
A developer from Mempool recently pointed out that Foundry USA Pool mined the least filled “non-empty” block in over two years, which included only seven transactions—a rare occurrence, surpassed only by a block with four transactions in January 2023.
This situation implies that while the climbing hashrate suggests a thriving network, the nearly empty blocks illustrate a powerful engine racing ahead without any loads.
This raises concerns for the creator of Mercury Layer and a former Nasdaq Board Director.
“Partially filled Bitcoin blocks tell an important story—promoting the store-of-value narrative could undermine its future,” he mentioned. “I really hope Bitcoin enthusiasts recognize that this space encompasses more than just podcasts, discussions, and the ‘number go up’ digital gold concept. If we fail to engage people in using Bitcoin for actual commerce, it’s all over,” he added.