As a researcher with a background in cryptocurrency and mining, I’ve been closely monitoring the recent decline in Bitcoin’s network hashrate. After 18 long months of continuous growth, it’s disconcerting to see this trend reversed. Based on my analysis of available data and reports from reliable sources, it appears that older ASIC systems are being disconnected from the network due to diminishing profitability.
After 18 uninterrupted months of growth in Bitcoin‘s network hashrates, there was a decrease observed in June. Although various explanations have surfaced regarding this trend reversal, it seems that miners using outdated ASIC systems are opting to withdraw from the network due to its diminishing profitability. Consequently, the overall hashrate of the network has taken a hit.
As a Bitcoin analyst, I can explain that the current hashrate of Bitcoin, which stands at approximately 600 exahashes, represents the collective processing power required by miners to solve complex cryptographic puzzles and add new transactions to the blockchain. The more miners there are in the network, the greater the overall hashrate becomes. Conversely, when miners leave the network, the hashrate decreases as fewer computing resources are available to process transactions. This recent drop in Bitcoin’s hashrate marks a shift in mining dynamics after 18 months of consistent growth.
As an analyst, I would rephrase the given text as follows: With hashrates reaching hundreds of exahashes, the energy consumption required by mining equipment is immense to earn mining rewards. Miners with outdated ASICs have found it unprofitable to continue operations post-Bitcoin’s April halving. Their rewards were significantly reduced due to the halving event.
As a analyst, I’ve observed that miners using outdated mining rigs consume significantly more electrical energy compared to their competitors who have recently upgraded their technology. With the latest halving event, the profits derived from each block have been reduced, making it economically unviable for these miners to continue participating in the network with their older equipment.
As a crypto investor, I’ve been closely monitoring the mining landscape, and according to a recent post on Reddit by Hashrate Index, if the electricity cost surpasses $0.09 per kWh for my S19 XP and M50S++ miners, or even $0.08 per kWh for the K Pros and M50S+ models, I’ll be operating at a loss. At around $0.06 to $0.07 per kWh, my S19j Pro+, j Pros, and M30S++ miners may struggle to break even. Consequently, many miners with similar ASIC models have started disconnecting their rigs due to the financial unviability of continuing operations under these conditions.
I believe the decrease in Bitcoin’s hashrate is only short-term. Miners will soon upgrade their mining equipment to address this issue, while Bitcoin’s alluring price increases will attract new miners as well. As a result, the number of miners within the Bitcoin community will expand, ultimately driving up the hashrate once again.
Based on our analysis, CoinShares anticipates a hash rate increase to approximately 700 exahashes by the year 2025. However, following the halving event, there is a potential decline of up to 10% in the hash rate due to miners shutting down less profitable ASICs.
One plausible explanation circulating refutes the notion that a significant drop in hashrate is caused by miners heavily selling off their Bitcoin rewards. This perspective gains little credence given the insufficient evidence of substantial Bitcoin transfers from miners to exchanges, which would be necessary to impact the network’s overall hashrate.
Image by Pete Linforth from Pixabay
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2024-06-16 14:50