There is no bear market for Bitcoin network builders as more and more Bitcoin miners join the network which increases the difficulty.
It’s a new all-time high for Bitcoin (BTC) mining difficulty. At the same time that the Bitcoin hash rate reaches new highs, the difficulty setting, or complexity, that Bitcoin miners must overcome to resolve valid blocks has increased by 13.55%.
Despite the pressure of falling prices in 2022, the difficulty setting continues its steady upward march from the August 2021 lows. It reached an all-time high of 35.61T on October 10, after a period in which six blocks were resolved in quick succession.
For Mark Morton, CEO of Scilling Digital Mining, an Ireland-based Bitcoin mining company, “The upcoming difficulty adjustment suggests that miners are still finding enough profit margins to power up new machines and are likely taking advantage of falling machine prices.”
Morton also mentioned that the increase in difficulty and hash rate are “very positive for the security of the Bitcoin network. We are seeing the security of the network skyrocket even despite the drop in the price of Bitcoin.”
Difficulty adjustment occurs approximately every two weeks or every 2,016 blocks. Since the blocks have been solved on average slightly less than the ten minute target, the difficulty setting has been increased. According to Braiins, a Bitcoin mining tool company, the average time was just under nine minutes in the last 2,016 blocks, which is known as an epoch.
In the Bitcoin white paper, Satoshi Nakamoto explains that “if [los bloques] too fast, the difficulty increases.” In full:
“To compensate for increased hardware speed and varying interest in running nodes over time, proof-of-work difficulty is determined by a moving average pointing to an average number of blocks per hour.”
Morton told Cointelegraph that the price drop combined with increased difficulty could challenge miners who mismanaged their finances during the 2021 bull market. Indeed, threats of miner capitulation loom during the 2021 bear market. 2022, while some miners were forced to sell part of their holdings over the summer.
Morton explained: “Miners who assumed we would have a bull market and bought machines at high prices will certainly feel the pinch.” Some Bitcoin miners have started looking for ways to mitigate their costs, such as using waste heat to maintain stable temperatures in workspaces.
In a nod to the increasingly creative ways that miners are finding ways to harness untapped energy sources and utilize miners’ waste heat, Morton concluded that “Competition among miners to find innovative and strategic energy sources bodes well for the future of the network as direct dependence on the price of Bitcoin decreases.”
Cointelegraph shot a documentary on Bitcoin mining in September in collaboration with Digital Scilling Mining that investigates the use of organic agricultural waste to mine Bitcoin. the short film, Turning cowpat into digital goldwill air on Cointelegraph’s YouTube channel in 2022.
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