According to PANews, the Bitcoin network is currently experiencing a paradoxical phase characterized by high security and low profitability. The network's hash rate remains stable above 1 zettahash, a historical peak, while miner revenue per unit of computation has plummeted, leading to a structural reshuffle within the industry.
On November 27, Bitcoin mining difficulty decreased by 2% at block height 925344, reaching 149.30 trillion, marking the second adjustment of the month. Despite this, the block interval remains close to the 10-minute target. The 'hash price,' a key indicator of miner revenue, has dropped by 50% in recent weeks, hitting a record low of $34.20 per petabyte per second.
This contrast between high hash rates and low earnings stems from a polarization among miners. Smaller miners unable to secure cheap electricity are exiting the market, while larger operators with long-term power agreements and off-grid power stations continue to expand.
Even stablecoin giant Tether has paused its mining project in Uruguay due to uncertainties in energy costs and tariffs, reflecting the survival pressures on small and medium-sized miners. Although the hash rate appears unchanged, it is a result of industry consolidation, with the number of entities supporting network security significantly decreasing.
The trend towards centralization poses risks, as single factors like extreme weather or power grid limitations could trigger chain reactions. The capital market has already reacted, with the market value of listed mining companies evaporating by nearly $30 billion in November, dropping from a peak of $87 billion to $55 billion before slightly rebounding to $65 billion.
Investors' perceptions of mining companies are also shifting, viewing them less as 'Bitcoin substitutes' and more as data center businesses with added crypto attributes.
Western miners are exploring new revenue streams by signing long-term power contracts, relocating to flexible grid areas, or taking on artificial intelligence and high-performance computing (HPC) orders.
To gauge the industry's direction, three key indicators should be monitored: a significant decrease in mining difficulty would confirm the exit of high-cost miners, while a rebound would indicate the restart of idle capacity; transaction fees rising due to memory pool congestion could temporarily improve earnings; and policy changes, such as export controls or grid rule adjustments, could instantly alter cost structures.
The current paradox in the Bitcoin network is stark, with protocol-level security at an all-time high due to high hash rates, yet the underlying mining industry faces capital liquidation and consolidation pressures. If financial constraints and high energy costs persist, the industry may see more mergers and relocations. Conversely, if Bitcoin prices and fees rebound, some idle capacity may restart, but ownership and operational models have fundamentally changed.
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