On-chain data shows the Bitcoin Difficulty is headed for a 5% increase on Saturday, which would make BTC mining the toughest it’s ever been.
Bitcoin Difficulty Set To Rise In Response To Hashrate Recovery
The “Difficulty” refers to a metric that keeps track of how hard the miners would find it to perform their task of mining on the Bitcoin blockchain. This indicator’s value changes about every two weeks in events known as network adjustments.
These adjustments are entirely automatic, being guided by the code that Satoshi wrote into the cryptocurrency all those years ago. The pseudonymous creator added this feature to BTC with one aim: to ensure that the pace at which miners complete their task remains nearly constant.
As is common knowledge, validators on the Bitcoin network leverage computing power to ‘mine’ blocks. In theory, the more power that they add, the faster they should become at their task.
The BTC network doesn’t want this, however, so it raises its Difficulty whenever the miners increase their total computing power, also known as the Hashrate. The increase is always just enough to bring the miners’ speed back to a rate of 10 mins per block.
The network can also reduce its Difficulty if the validators aren’t performing their duty fast enough. The decrease is, once again, of a degree that would ease things about enough for them to mine a block every 10 mins.
The next Difficulty adjustment for Bitcoin happens to be scheduled for tomorrow. Below is data from CoinWarz that shows how the metric would change in this event.
It would appear that the Bitcoin Difficulty is estimated to go up by around 5.63% in this adjustment, due to miners pumping out blocks at a fast average rate of 9.47 minutes per block.
This increase would put the Difficulty at a value of 120.17 trillion hashes, which is higher than the 114.16 trillion hashes all-time high (ATH) set back in February.
The fast pace of the Bitcoin miners during the past couple of weeks is, as usual, a result of an increase in their Hashrate. As the below chart for the 7-day average value of the metric displays, miners’ power set a fresh record at the end of last month, before seeing a minor pullback to around previous ATH levels.
Miners make the major part of their income through the block subsidy, a fixed BTC reward that they receive with every block that they mine. But as the Difficulty ensures that the miners continue to mine at the same rate that they always have been, an increase in Hashrate doesn’t make their total revenue go up.
In fact, as fresh computing power joins the network, the share of the pie that everyone gets becomes smaller. Thus, with the upcoming sharp Difficulty increase, things could be about to get hard for the miners.
It’s possible that a Hashrate decline would follow this adjustment, as some miners might be forced to disconnect from the network. A scenario where the increase can be sustainable, however, is when the Bitcoin price goes up in the coming days, thus boosting the miner revenue in USD terms. It only remains to be seen, though, how the cryptocurrency would develop.
BTC Price
At the time of writing, Bitcoin is trading around $83,300, down 1% in the last week.
