Bitcoin mining difficulty crossed an all time high of 35.61 trillion hashes on Monday, as miners ramp up their operations or more miners join the network.
Bitcoin difficulty is an automatically adjusting feature of the bitcoin protocol that determines how difficult it is to mine a bitcoin block. It’s implemented to ensure transactions are processed at a steady pace, which is 10 minutes.
The difﬁculty is adjusted every 2016 blocks in line with hash rate changes. As of the latest estimates, the difficulty spiked by 13% to reach 35.61 trillion, making it the biggest upward adjustment in the mining difficulty on the Bitcoin network since the middle of 2021. The increased block difficulty will make it harder for miners to compete in solving cryptographic puzzles using specialized hardware chips called Application Specific Integrated Circuits (ASICs).
And it’s not just the difficulty level that has soared. Bitcoin network’s hash rate, another important metric, is at an all-time high of 257 exahashes per second (EH/s) according to data from The Block. The hash rate is the amount of computing power assigned to the blockchain to verify transactions and earn block rewards. The mining difficulty rises in response to an increase in hash rate.
A myriad of factors are credited for the jump in the difficulty rate, according to analysts. "It’s a combination of infrastructure coming online, meaning more capacity being built out, heatwaves dissipating which is resulting in better uptime and less curtailment across mining facilities, and more efficient latest generation mining equipment being deployed," Kevin Zhang, senior vice president at mining pool Foundry, told The Block last week.
The spike in block difficulty can potentially impact the miner's profitability, costing more to mine blocks. As the difficulty jump was anticipated, analysts had estimated it could crush the miners’ profitability by about 20%, The Block previously reported. This comes at a time when Bitcoin’s price has been on a slump year-to-date dropping from $46,000 to nearly $19,300 now amid an unfavorable macro scenario.
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