Bitcoin network reaches record hashrate and is more secure than ever

The Bitcoin (BTC) network is in better shape than ever. On October 21, the hashrate reached a new record of 769.8 exahashes per second (EH/s). A higher hashrate generally means a more secure and robust network, a positive development for Bitcoin.

Why a higher hashrate is important

The hashrate reflects the total computing power used to verify transactions on the Bitcoin network and add new blocks to the blockchain. The higher the hashrate, the more difficult it is for malicious parties to manipulate or attack the network, such as in a 51% attack. This type of attack gives someone control over the majority of computing power, which could compromise the integrity of the network. In short, the more participants there are who validate transactions, the smaller the chance of fraud or attacks.

The increase in the hashrate follows an upward trend that has been visible since 2021. According to data from blockchain analytics platform BitInfoCharts, this increase is partly due to improved mining hardware, such as specialized chips called application-specific integrated circuits (ASICs), which are designed to mine Bitcoin more efficiently.

Economic challenges for miners

While the higher hashrate is a positive signal for the security of the network, it also increases the cost of mining Bitcoin. This is part of the complex economic game where the network seeks a balance between the costs of mining and the market price of Bitcoin. After the halving of the block reward in 2024, where the reward for mining a block was halved, smaller mining companies may find themselves in financial trouble. Less efficient mining equipment becomes unprofitable, which can lead to the closure of these companies.

Bitcoin sales by miners remain limited

Despite increasing mining costs due to the rising hashrate, sales of Bitcoin by miners remain surprisingly low. On October 20, miners sent just 2,916 BTC to crypto exchanges, which was one of the lowest selling days in the past 30 days. This indicates that many miners are confident in the future price development of Bitcoin and are choosing to hold on to their supply rather than sell.