Data shows Bitcoin mining difficulty has risen by 10% in the latest network adjustment and has set a new all-time high.
Bitcoin Mining Difficulty Sets New ATH Of 37.59 Trillion
“Mining difficulty” is a feature on the Bitcoin blockchain that controls how hard miners are currently finding to mine on the network. The reason the concept exists, to begin with, is that the BTC blockchain intends to keep the “block production rate” as close to a constant, default value as possible.
Block production rate is the rate at which miners are printing new blocks on the network (or more simply, the speed at which they process transactions). However, since this rate depends on the ability of miners to mine, it can fluctuate every time miners move in and out of the network.
The total amount of computing power that miners commit to a block is known as the “hashrate.” If the value of this metric changes, so does the block production rate. But as mentioned before, the network wants this value not to change like this and to remain constant.
So to solve this problem, what Bitcoin blockchain does is speed up or reduce the difficulty of mining. For example, if the hashrate goes down, the miners become slower because there is less power available, and thus the block production rate goes down. The network counters this by placing the difficulty just enough that the miners still connected to the chain can hash new blocks at a sufficiently faster rate.
The Bitcoin network makes such a switch in difficulty in the regular difficulty adjustment, which takes place approximately every two weeks. All this process is automatic, because the difficulty is an inbuilt feature of the BTC code.
Here is a chart showing the trend in BTC mining difficulty over the past year:
The value of the metric seems to have shot up recently | Source: Blockchain.com
As shown in the chart above, Bitcoin mining difficulty has risen sharply in the latest adjustment and has set a new all-time high. The reason behind this is a sudden 10% increase in the indicator value that can be seen in the graph for mining hashrate:
Looks like this metric has also jumped in recent days | Source: Blockchain.com
From the graph, it can be seen that the average 7-day Bitcoin mining hashrate has decreased to a very low level, which is causing the difficulty. However, recently, the metric value has increased rapidly and is currently at an all-time high.
It is because of this rapid increase in hashrate that the network is forced to make a large positive adjustment in difficulty.
BTC price
At the time of writing, Bitcoin is trading around $21,100, up 23% over the past week.
BTC hasn't moved much in the last few days | Source: BTCUSD on TradingView
Featured images from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Blockchain.com