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The network is continuing very well along each block, but the average hash rate has taken a decent hit over the past month, dropping 17.4% from the recent all-time high. Much of the hash leaving the network that we are seeing is due to 1) the hash rate following a lower bitcoin price as older machines become unprofitable on margin and 2) the impact of the recent heat wave in United States and reduction, especially in Texas. As energy demand soars during the summer months and electricity prices rise with it, we can expect periods when industry-wide miners halt the rate of hash in accordance with their electricity agreements.
There are only a handful of times in the history of Bitcoin where we have seen the hash rate drop this much. Yet it is still up 13.93% this year, while the price of bitcoin is down 56%.
Hash rate drop from an all-time high difficulty level
As a result, the difficulty adjustment saw its largest downward revision (5.1%) since the Chinese mining ban, which was the third consecutive downward adjustment and the fourth in the last five. two-week periods (technically: 2016 blocks). This is a welcome sign for the profitability of miners who can stay online. With the adjustment and the recent rally in price from the lows, the hash price rebounded 48% from its lows to back above $0.10 (at least for now).
Total mining difficulty with percentage change
Marginal bitcoin production cost estimates for some of the largest public bitcoin miners are available $6,000 to $10,000 mainly representing electricity costs. Since they run some of the most efficient next-gen hardware on the market, estimated production and costs of pure electricity are much higher for the whole network. Created by Charles Edwards, an estimate of the total cost of Bitcoin network electricity currently sits around $16,000. It’s rare to see bitcoin fall below this rising electricity cost estimate throughout its history, but it has happened before.
