- The difficulty of mining bitcoins has been steadily rising since January 2023.
- Mining difficulty is an integral part of Bitcoin’s proof-of-work consensus process.
The complexity of solving the mathematical equation connected with a block, which is a measure of Bitcoin’s mining difficulty, surpassed 80 trillion on Friday.
With the mining difficulty hitting 81.73 trillion, the network hash rate—which measures the total processing power allocated by miners—rose to 562.81 EH/s, a new all-time high, according to blockchain explorer BTC.com. The difficulty of mining bitcoins has been steadily rising since January 2023, and it is expected to reach 100 trillion in the near future.
Integral Part of Proof-of-Work Consensus
A measure of the difficulty of adding a new block to the blockchain, mining difficulty is an integral part of Bitcoin’s proof-of-work consensus process. A miner’s computing power and energy required to discover the correct hash for the new block increases as the difficulty level rises. The difficulty level of the Bitcoin network has increased by more than 100% in the last year.
In late April, a phenomenon called the “Bitcoin Halving” will occur, whereby the mining rewards for Bitcoin will be divided in half. To combat inflation, Bitcoin’s developers include a decrease into the token’s structure at regular intervals (around every four years). May 2020 was the last time the mining reward for Bitcoin was cut in half.
The incentives for Bitcoin will decrease from 6.25 BTC to 3.125 BTC during the next halving. A drop in hash rate can result from halving if inefficient miners quit because they can’t afford to keep up with their mining payouts. Since the network aims to keep block output steady every 10 minutes, a lower hash rate should reduce bitcoin mining difficulty.
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