Bitcoin Network Hashrate Reaches New All-Time High, but the Mining Industry Faces Economic Strain

The Bitcoin network hashrate—the sum total computing power securing the Bitcoin network—reached a new all-time high on Sept. 1, 2024

Bitcoin’s network hashrate reached a new peak on Sept. 1, clocking 742 exahashes per second (EH/s), while the mining industry continues to face economic challenges.

Bitcoin hashrate reaches new highs

The Bitcoin network hashrate — the sum total computing power used to secure the Bitcoin network — reached a new all-time high on Sept. 1, clocking in at over 742 EH/s, according to data from CryptoQuant.

The hashrate has steadily risen since 2021, which is logical considering the constant move toward higher-performance mining hardware like application-specific integrated circuits (ASICs).

Bitcoin network hashrate 2021-2024. Source: CryptoQuant.

As the network hashrate increases, so does the cost to mine Bitcoin BTC , as miners are forced to upgrade to more powerful mining rigs, expand operations, and use more energy to remain competitive.

Bitcoin mining difficulty continues to rise

The increasing hashrate also corresponds with an increase in the Bitcoin mining difficulty, which rose to new highs throughout 2024.

The mining difficulty is adjusted every two weeks to ensure that a block is mined, on average, every 10 minutes, regardless of the hashrate. As the hashrate increases, the difficulty also rises to maintain the targeted block time.

Bitcoin mining difficulty 2021-2024. Source: CryptoQuant.

The increased difficulty rate makes it harder for miners to find valid blocks, which in turn decreases their revenue from mining rewards and any collected transaction fees.

Bitcoin miner revenue crashes to 8-month lows

The combination of increased hashrate and the corresponding high difficulty rate continues to plague miner revenue, which crashed to eight-month lows in August 2024.

According to data from BTC.com, Bitcoin miners earned a total of $827.56 million in August, marking the lowest revenue since September 2023, when revenue briefly dropped below $800 million due to a difficulty adjustment.

After reaching all-time highs of over $1.2 billion in early 2024, Bitcoin miner revenue has steadily declined throughout the second half of the year as the hashrate continued to increase and made it harder for miners to find valid blocks.

Bitcoin mining revenue 2023-24. Source: BTC.com.

RelatedBitcoin mining CEO eyes hashrate contracts to offset rising costs

The financial challenges facing miners were also documented in a recent J.P. Morgan report, which revealed that miners are facing a revenue squeeze from multiple sources, including a slashed block subsidy and increased energy costs.

According to the report, of the five Bitcoin mining companies analyzed, MARA and Riot Platforms stood out as having the highest expenses per Bitcoin at approximately $55,700 and $62,000, respectively.

These high costs and lowered revenues are driving mining companies to consider several options to bolster revenue and remain in business.

Many mining companies are pivoting from issuing corporate debt to offering equity to investors to avoid high debt-to-equity ratios.

Other mining companies are considering diversifying operations into artificial intelligence and high-performance computing to make up for shortfalls in mining revenue — dedicating at least a portion of their computing power and physical facilities to information processing data centers.

Renewable energy as the answer to offset costs?

Companies like MARA, formerly Marathon Digital, are also exploring renewable energy to remain competitive in a tough mining environment.

MARA has experimented with landfill-gas-to-energy systems, which convert methane gas from garbage landfills into usable energy. The company also signed a deal with the Kenyan government to develop the country’s renewable energy infrastructure — an indication that the company may begin sourcing more of its energy needs from sustainable sources.

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