Bitcoin’s mining difficulty level rose 2.18% on Wednesday to an all-time high. The level changes every two weeks and measures the extra computing power a miner has to use to verify transactions on a block. A higher difficulty indicates that it is more competitive to mine Bitcoin, which reduces profits. The network hashrate has also reached an all-time high.
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Fast facts
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The mining difficulty reading came in at 52.35 trillion at a block height of 794,304 during Wednesday’s adjustment. This follows a 3.4% increase in the previous June 1 adjustment, according to data from BTC.com.
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The difficulty of mining Bitcoin generally increases when more miners are active, which increases competition for Bitcoin rewards in exchange for validating transactions on the network. The higher the difficulty, the less likely a miner is to secure an entire block on the chain, which in turn can reduce a miner’s profitability.
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Mining difficulty adjustments correlate to changes in hashrate, the level of computing power used for mining.
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“In short, difficulty follows hashrate up or down, and hashrate is determined by the overall profitability of building and operating bitcoin data centers,” said Andrew Webber, head of Digital Power. Optimization which works with power producers to deploy Bitcoin mining operations. Forkast in an email response earlier this month. “If Bitcoin spot price goes up, it means bigger profits for miners.”
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Bitcoin’s hashrate was around 392.6 exahashes per second on Wednesday, an increase from the 375.4 exahashes recorded during the previous adjustment on June 1, according to data from Blockchain.com.
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Bitcoin fell 3.63% to US$25,045 in the past 24 hours as of 11:10 a.m. HK, but is up around 51% so far this year, according to data from CoinMarketCap. The world’s largest cryptocurrency by market capitalization has lost 5.01% in value over the past seven days.
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