Bitcoin's Hash Rate Has Reached Record Levels! What Does This Mean? Here Are the Details.

Bitcoin's hash rate has reached a record level, signaling an increasing disconnect between network security and real-world usage.

Bitcoin's Hash Rate Has Reached Record Levels, But Network Activity Continues to Remain Weak

Despite miners allocating more computational power than ever, low transaction fees and nearly empty blocks are raising concerns about the long-term sustainability of Bitcoin's network economy.

According to Glassnode, the 14-day moving average hash rate of Bitcoin recently reached an all-time high of 838 exahash (EH/s), while the 24-hour hash rate rose to 974 EH/s, the second highest level recorded so far.

The network difficulty adjustment, which provides a consistent block time of approximately 10 minutes, is expected to increase by over 3% in the coming days, creating a new peak.

However, this increase in mining power is not in line with broader market trends as Bitcoin's price remains 25% below its all-time high, while transaction activity and fees are worryingly low.

Bitcoin miners currently earn block rewards of 3.125 BTC per block and generate income through transaction fees, which have dropped to just 4 BTC per day. This means that miners largely rely on block rewards for profitability.

As the Bitcoin block subsidy halves every four years, low transaction activity may threaten mining incentives over time.

Experts Warn About Future Risks

Industry experts are concerned that the narrative of Bitcoin as a "store of value" may hinder its long-term adoption, prioritizing holding BTC over spending it.

As the security and mining costs of Bitcoin continue to rise, the long-term health of the network may depend on increasing real-world adoption and transaction activities beyond speculation and digital gold narratives.