The Hashrate Is Falling, and the Network Is Adjusting
A historic difficulty drop is the protocol working exactly as designed, but the migration of computing power toward AI workloads raises a question about what secures the network long term.
Bitcoin's mining difficulty has recorded one of its sharpest declines, following a fall in the total computing power devoted to the network.
This is the protocol operating as designed. Difficulty adjusts roughly every two weeks so that blocks continue arriving about every ten minutes regardless of how much computing power is competing. When miners switch off, the remaining ones find blocks more easily, and their economics improve automatically.
What drove the decline
Margins. Hashprice — revenue per unit of computing power — has been near record lows around $34 to $35 per petahash per second per day, the product of the 2024 halving and years of hashrate growth.
Simultaneously, the electricity and infrastructure that mining consumes has acquired a far more lucrative alternative use. Listed miners have announced more than $70 billion in AI and high-performance computing contracts, and machines are being switched off to free capacity for those workloads.
The security question
Bitcoin's security model rests on the cost of acquiring a majority of network computing power. Lower total hashrate means a lower cost to attack.
At current levels the network remains far beyond the reach of any plausible attacker, and forecasters expect hashrate to resume growing — potentially reaching 1.8 zettahash by the end of this year and 2 zettahash in early 2027 as more efficient machines replace older ones.
The longer-run version of the question is harder. Block rewards halve every four years and eventually approach zero, at which point security must be funded entirely by transaction fees. Fee revenue has historically been a small fraction of miner income, and it depends on demand for block space that has not grown as advocates once expected.
Why concentration matters more than the total
A related concern is where the remaining hashrate sits. As marginal operators shut down, the survivors are those with the cheapest power and the largest scale — a smaller number of larger companies, several of which are publicly traded and subject to the jurisdictions where their facilities are located.
A network secured by thousands of independent operators has different properties than one secured by a dozen corporations with shareholders and regulators. That shift is happening gradually and has attracted less attention than the price.
