Bitcoin's Computational Strength Set to Reach New Heights Before Next Halving
The Bitcoin network's hashrate has surged significantly in 2024 and is poised to break through critical milestones in the coming years.
Key Insights:
- The Bitcoin hashrate has escalated by 56% over the last year, averaging around 787 EH/s on a seven-day basis.
- Assuming a conservative growth rate of 20%, the network could hit 1 zettahash by 2027.
- Since October, the Bitcoin network has experienced seven consecutive positive difficulty adjustments, marking a trend not observed since China’s mining ban in 2021.
Bitcoin’s hashrate, which indicates the computational power required to mine a block in the proof-of-work blockchain, is projected to achieve 1 zettahash per second before the next halving event in about 3.5 years. This milestone will force miners to seek more economical energy contracts and optimize their mining equipment.
The anticipated average hashrate could reach the target level despite a gradual growth of 20% annually. Historically, it has increased by 65% per year since 2020, currently standing at about 787 EH/s based on a seven-day moving average.
The hashrate is critical for the profitability of Bitcoin mining. Higher hashrate equates to increased energy expenses, making operational optimization essential for miners. Additionally, the network’s security has improved by 56% in the past year, showcasing robust growth.
Current Climate:
The growth cadence surged in the latter half of 2024 following April’s halving, where block rewards diminished by 50%, resulting in reduced miner revenue. The financial strain led some miners to diversify into artificial intelligence (AI) computing, while others resorted to acquiring Bitcoin from the market.
As the hashrate reaches 1 zettahash, miners must adopt innovative strategies to remain viable amidst evolving market conditions.
Recent observations suggest that the hashrate might have already approached 1 zettahash for a single block, indicating a significant shift in the mining landscape. However, these readings can fluctuate due to the stochastic nature of mining, making a seven-day moving average preferable for accuracy.
Further complicating the equation, the mining difficulty has also risen, with seven consecutive positive adjustments recorded since October, currently set at 109.78 trillion. This adjustment occurs every 2,016 blocks, recalibrating to maintain a 10-minute block time target.
