In 2024, Bitcoin’s hashrate surged by about 50%, marking a potential eighth consecutive increase. Here are some key points to consider:
- Over the past year, the Bitcoin hashrate has risen by 56%, averaging around 787 EH/s based on a weekly assessment.
- If the growth continues at a modest rate of 20%, the network could reach 1 zettahash by 2027.
- Since October, the Bitcoin network has experienced seven straight positive adjustments in mining difficulty, a trend not observed since the mining ban in China in 2021.
The hashrate, which represents the computational power required to mine Bitcoin blocks, is expected to approach 1 zettahash per second before the next halving event in approximately 3.5 years. This scenario places pressure on miners to secure affordable energy sources and invest in more efficient mining equipment.
Even with a conservative annual growth rate of 20%, the average hashrate could hit the 1 ZH/s mark by 2027. Since 2020, the hashrate has typically increased by an average of 65% annually, currently standing at around 787 EH/s, as reported by Glassnode.
The hashrate significantly impacts the profitability of Bitcoin mining. A higher hashrate leads to increased energy expenses, making it crucial for miners to optimize their operations. Additionally, the hashrate contributes to the overall security of the network, which has also seen a 56% increase in the past year.
The growth rate picked up in the latter half of 2024 following April’s halving, which reduced block rewards by 50% to 450 BTC daily, squeezing miners’ revenues. Some miners struggled to remain profitable solely through Bitcoin mining, prompting them to diversify into artificial intelligence (AI) computing or purchase Bitcoin directly from the market.
As the hashrate approaches 1 ZH/s, miners will need to adopt innovative strategies to navigate a more competitive landscape. Interestingly, there are indications that the hashrate may have already reached 1 ZH/s for a single block, although such readings can be misleading due to the inherent variability in mining and network conditions. The industry typically relies on a seven-day moving average for more accurate assessments.
In addition to the rising hashrate, mining difficulty is also increasing. Since October, the blockchain has recorded seven consecutive positive adjustments in difficulty, currently set at 109.78 trillion (T). Difficulty recalibrates every 2,016 blocks to maintain a target block time of approximately 10 minutes. The last instance of seven consecutive positive adjustments occurred after the 2021 mining ban in China, which had led to a 50% drop in hashrate. This time, however, both hashrate and difficulty are rising in tandem.