Bitcoin’s Hash Rate Soars, But Where Are the Passengers? 🚂💨

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It is a truth universally acknowledged that a blockchain in possession of a high hash rate must be in want of a purpose. 🧐

What to know:

  • The hash rate, that most esteemed measure of computational might, has reached an all-time high on a 14-day moving average, while the price of bitcoin languishes in a most unseemly manner.
  • Transaction fees, those humble yet essential rewards, remain pitifully low, averaging a mere ~4 BTC per day—hardly enough to sustain a miner’s dignity, let alone their profitability.
  • Blocks, those vessels of transactional activity, are found to be distressingly empty, casting a shadow over the network’s vitality beyond mere price speculation.

The Bitcoin blockchain’s hash rate, that most impressive of metrics, continues its relentless ascent, revealing a most curious divergence between the network’s activity and the price of its native token, bitcoin (BTC).

On a 14-day moving average, the hash rate has recently achieved an all-time high of 838 exahashes per second (EH/s), and on a 24-hour basis, it soared to 974 EH/s, the second highest level ever recorded, according to the ever-reliable Glassnode data. 📊

However, as any discerning observer might note, measuring over a 24-hour window can be fraught with inaccuracies due to the variability of block times. Thus, longer timeframes provide a more reliable insight. In two days, Bitcoin’s difficulty adjustment—that most necessary recalibration occurring every 2016 blocks to maintain a 10-minute block interval—is expected to increase by over 3%, reaching yet another peak. 🏔️

This divergence between hash rate and price is most notable. While bitcoin remains approximately 25% below its all-time high, the costs of mining continue to rise. For miners to maintain their profitability and cover their operational expenses and capital expenditures, a robust bitcoin price, full blocks, and high transaction fees are essential. 💰

At present, miners derive their revenue from two sources: block rewards (3.125 BTC per block in the current epoch) and transaction fees. Yet, transaction fees are woefully low—averaging around 4 BTC per day, or roughly $377,634. As bitcoin’s block subsidy continues to halve every four years, sustained or increasing transaction activity will be critical to maintaining mining incentives. ⚖️

Near Empty Blocks

Developer Mononaut, from Mempool, recently observed that Foundry USA Pool mined the emptiest “non-empty” block in over two years, containing a mere seven transactions—a rarity surpassed only by a block with four transactions back in January 2023. 🕳️

In other words, while the rising hash rate paints a picture of a booming network, the near-empty blocks suggest a powerful train speeding down the tracks—but without passengers. 🚂💨

This state of affairs is a cause for concern for Nicolas Gregory, creator of the Mercury Layer and a former Nasdaq Board Director.

“Half-empty bitcoin blocks tell a tale—hawking the store-of-value line could scupper its future,” Gregory remarked on X. 🐦

“I hope bitcoiners realize this space is more than just podcasts, spaces, and the ‘number go up’ digital gold narrative. If we don’t get people using bitcoin for real commerce, it’s game over,” Gregory added. 🎮

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2025-04-03 13:31