With the rise of Ordinals, the profitability of Bitcoin miners has reached new historical levels.
Bitcoin miners earned over $61 million in transaction fees on the network in the last week, according to data from the IntoTheBlock platform.
The profitability of Bitcoin miners, which is currently the most powerful blockchain network in the world, is increasing as demand for Ordinals, the popular inscriptions that allow data and information to be recorded within the blockchain, increases.
According to the blockchain industry market intelligence platform, this week transaction fees from miners on the Bitcoin network surpassed validator revenue on Ethereum, amounting to about $38 million over the past 7 days.
The increase in profitability and revenue of Bitcoin miners coincides with the increase in the network's hash power, which reached new historical levels recently.
As reported by this outlet, Bitcoin's hash rate reached 497,4 exahashes per second (EH/s) last Friday. However, since then until now, Bitcoin's hash rate has continued to rise, marking a new all-time high of 500,9 EH/s, at the time of going to press.
Source: CoinWarz
IntoTheBlock analysts attribute the increase in Bitcoin miners' profitability and the increase in the hash rate to the growing demand for the network, caused by the popularity of the Ordinals protocol, which records more than 44,94 million inscriptions on the blockchain.
Bitcoin mining difficulty also hits new all-time highs
In line with the increase recorded in the Bitcoin hash rate, the network's mining difficulty also marked a new historical level, of 67,96 trillion, according to data consulted on the CoinWarz platform.
Source: CoinWarz
The increase in Bitcoin mining difficulty is an indicator of the growing competition and security of the blockchain network. Throughout this year, the difficulty has been adjusted upwards in each 2016 block cycle, reflecting the increase in hash power and the growing interest in the cryptocurrency.
The latest difficulty adjustment, as seen in the chart above, took place at network block #818.496, setting a new all-time high for this metric.
Bitcoin mining difficulty indicates that miners on the network have to invest more computational power to find and validate new blocks on the chain, making it a key factor for the security and sustainability of the blockchain, as it ensures that blocks are produced at a constant rate and that double-spending attacks are prevented. Bitcoin mining difficulty also determines the profitability and sustainability of this activity.
Bitcoin hash rate, an indicator of the computing power to mine BTC
The hash rate is the indicator that measures the processing capacity of the Bitcoin network.
This indicator is directly related to the mining difficulty, so the higher the hash rate on the Bitcoin network, the more difficult it will be to generate a new block in the chain. This occurs according to the design of the Bitcoin protocol, which guarantees that new blocks on the network, and therefore new bitcoins, are generated approximately every 10 minutes.
Bitcoin has experienced unprecedented growth in hash rate in recent years, which means that Bitcoin miners are investing more and more resources and computing power into the network, to ensure its security and operation.
Finally, the increase in the hash rate and difficulty levels of Bitcoin mining comes at a crucial time for the cryptocurrency market. On the one hand, there is the price rally that Bitcoin and the crypto market in general have been gaining, thanks to the confidence and positive sentiment of investors who are expecting the approval of a Bitcoin spot ETF by the SEC in the coming months. On the other hand, the fourth Bitcoin halving is approaching, which is scheduled to occur in mid-April next year, and which will halve the block reward that Bitcoin miners receive for validating transactions.
This halving will reduce the Bitcoin block reward to 3,125 BTC, or about $117.400, based on the cryptocurrency's current market price.
Continue reading: Bitcoin price marks new yearly high
