Bitcoin’s mining difficulty is about to increase by roughly 4%. This is because the network’s hashrate (total computing power used for mining) has recently exploded.
What is Mining Difficulty?
Bitcoin’s difficulty is a measure of how hard it is to mine a block. It’s designed to keep the time it takes to mine a block around 10 minutes. Miners get rewarded for each block they mine, and this reward controls Bitcoin’s inflation rate. The system adjusts the difficulty to maintain a consistent block creation rate.
Hashrate Soars, Difficulty Follows
When miners increase their hashrate (meaning they have more computing power), they find blocks faster. To counteract this, the network increases the difficulty. Conversely, if the hashrate drops, the difficulty decreases. These adjustments happen roughly every two weeks.
The Recent Adjustment
The average block time since the last difficulty adjustment has been 9.6 minutes – faster than the target of 10 minutes. This is due to a massive increase in the hashrate, which recently hit an all-time high. To slow things down, the difficulty will increase by over 4%, likely setting a new all-time high as well.
Bitcoin’s Price
At the time of writing, Bitcoin is trading around $97,000, down over 6% in the last week.
