- The difficulty of mining Bitcoin registered a new all-time high increasing by 3.4%.
- The latest adjustment to the network increased the mining difficulty by 3.44% to reach the all-time high of 36.835 billion hashes.
- Miners are using more resources to execute the same amount of work in a context where the price of Bitcoin seems stuck near $19,000 USD.
When we talk about Mining Difficulty, we refer to how difficult it is for miners to mine a block on the blockchain of a particular cryptocurrency, as is the case with Bitcoin. That is, as mining difficulty increases, more computing power is required to verify transactions on the blockchain.
Since Bitcoin is designed to add a new block to the blockchain every 10 minutes on average; every 2,016 blocks, which is approximately every two weeks, a difficulty adjustment is made with the aim of maintaining these 10 minutes on average.
This makes the mining difficulty is a reflection of the level of competition between the miners: a higher difficulty indicates more competition.
Bitcoin mining difficulty does not seem to have a ceiling
The latest adjustment to the network saw Bitcoin mining difficulty record a new all-time high rising 3.4%, mining difficulty increased by 3.44% to hit the all-time high of 36.835 billion hashes.
It is necessary to remember that the previous adjustment increased the adjustment by 14% and, although the most recent one was much milder in comparison, the conclusion is the same: miners will have to spend additional resources to do the same amount of work.
Namely, miners are using more resources to execute the same amount of work in a context where the price of Bitcoin seems stuck near $19,000 USD.
As a result, miners are currently facing significant pressure. In fact, they have seen how their profitability is reduced by three vectors: Increase in difficulty, increase in energy costs and decrease in the price of Bitcoin.
Particularly affected by the measure are those miners or groups that have less computing power or outdated mining equipment that consumes too much energy.
According to a report From IntoTheBlock, mining companies have started liquidating their Bitcoin positions likely to stay afloat. According to the report, these companies currently have 1.9 million BTC, a minimum not seen since February 2010.
Also, Compute North recently filed for bankruptcy due to adverse crypto market conditions.
You might be interested in: