Bitcoin Mining Difficulty Has Set a New All-Time High (ATH)

On-chain data shows that the Bitcoin Mining Difficulty has set a new all-time high (ATH) after the jump in the latest network adjustment.

Bitcoin (BTC) mining difficulty has set a new all-time high (ATH) following an increase in the latest network adjustment.

Bitcoin Mining Difficulty Has Increased By Almost 4% Now

The BTC Difficulty saw a positive adjustment recently, as indicated by data from CoinWarz. The “Difficulty” in this context refers to a metric that gauges the difficulty involved in mining blocks on the Bitcoin blockchain. It is measured in units of hashes.

This concept is inherently integrated into the BTC code, with automatic adjustments occurring roughly every two weeks. During these adjustments, the network can either increase or decrease the Difficulty.

The type of adjustment is determined by the miners’ activities since the last adjustment. A key aspect of the Bitcoin network is that the block time maintains a constant value of 10 minutes per block.

As the miners collectively increase their computing power, also known as the hashrate, they naturally become faster at their task and generate blocks at a higher rate.

But since the BTC blockchain aims to keep its block time limited to 10 minutes per block, it increases the difficulty just enough in the next regular adjustment to bring the miners back down to the desired speed.

Similarly, when the hashrate decreases, the network lowers the Difficulty to ease things up for the miners, allowing them to return to generating blocks at the standard rate.

Now, here’s a chart that shows how the Bitcoin Difficulty has changed over the past three months:

The above graph indicates that the Bitcoin Difficulty saw a significant increase in the latest network adjustment. At around 4%, this jump brought the metric to a new ATH of over 95.6 trillion hashes.

The positive adjustment comes in response to the hashrate reaching a new ATH in its 7-day average, as can be seen in the below chart from Blockchain.com.

But why does Bitcoin Difficulty exist in the first place? The reason for that is that with block time being capped, another metric is also constrained: the BTC production rate.

When miners hash blocks on the network, they receive block subsidies as compensation. This reward is paid out in freshly minted BTC, meaning that these chain validators are generating new tokens as they mine blocks.

In a world without the Difficulty feature, miners would be able to increase their computing power indefinitely to reap rewards at a faster rate. Ultimately, the cryptocurrency’s value would suffer from inflation.

Satoshi anticipated this scenario, which is why the Bitcoin creator came up with the innovative idea of Difficulty to ensure the asset’s supply growth remains predictable.

BTC Price

At the time of writing, Bitcoin is valued at around $67,500, having fallen by 1% over the past week.

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