Bitcoin mining difficulty level reached a new high after another rise on Monday, increasing 6.47% and making it even more difficult for Bitcoin miners to discover blocks.
According to CoinWarz data, after the latest update, BitcoinMining difficulty – the estimated number of hashes needed to mine a block – now stands at 61.03 trillion.
This is the third consecutive increase Bitcoin mining difficulty, which has almost doubled since October last year.
Bitcoin’s mining difficulty is readjusted every 2,016 blocks, or approximately every two weeks, as the network determines whether miner activities during that period have resulted in a reduction or increase in the time it takes to find a new block.
This adjustment period allows the network to evaluate whether miners were able to find new blocks faster or slower than the target time of 10 minutes per block.
Mining difficulty is increased if blocks are mined too quickly and decreased if it takes more than 10 minutes to mine a block.
An increase in mining difficulty means that miners must allocate more computing power to successfully mine a block, and indicates that an increasing number of miners are joining the network, as mining becomes more computationally intensive.
Halving and mining Bitcoin
Some experts believe that the spike in activity can be attributed to the upcoming Bitcoin halving, which will take place in approximately 6.5 months.
“This flurry of mining activity could be aimed at maximizing returns before Bitcoin is halved next year,” said Jeff Mei, COO of crypto exchange BTSE. Decrypt. “After this point, the rewards for mining Bitcoin will be cut in half, as the name suggests. So it is possible that we will see miners exploit all possible value before this point.
Mauricio Di Bartolomeo, co-founder and CSO of crypto lender Ledn, also believes that the upcoming Bitcoin halving will be a “huge deal” for miners.
“There is going to be a rush of miners coming online between now and May, every miner is going to try to squeeze every last drop out of their equipment from the payout rate of 6.25 per block, because 6.25 BTC/ block, it will drop to 3.125. BTC/block,” said Di Bartolomeo Decrypt. “So those who have machines waiting to connect will rush to put them on the network to collect the highest payment rate while they still can.”
According to him, this will lead to an increase in difficulties until the halving. However, once the halving occurs, “this huge rush of connecting new miners will cease, as those who come online from that point on will realize significantly lower returns.” »
Other reasons, according to BTSE’s Mei, could also reflect miners’ heightened fears of an upcoming dramatic rise in energy prices, which would have a major impact on their profitability.
“With regional tensions exacerbating across multiple hotspots, miners could expect oil prices and energy prices in general to become less affordable,” Mei said. Decrypt.
Edited by Liam Kelly.