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Bitcoin [BTC] proponent elucidates on the difficulty of mining Bitcoin

Priya

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Bitcoin [BTC] proponent elucidates on the difficulty of mining Bitcoin
Source: Unsplash

Andreas Antonopoulos, the author of Mastering Bitcoin and a well-known Bitcoin proponent, spoke about the difficulty of Bitcoin mining and why each block of Bitcoin is mined every ten minutes, during a Q&A session on Youtube.

The author stated that he was asked whether it is a rule or an average number based on computation power that blocks are formed every ten minutes. To which, he stated that it is both, adding that it is a rule in Bitcoin that the difficulty target is based on the computational power of the network that forms blocks every two weeks.

He went on to say:

“The rule in Bitcoin is [about] the difficulty of doing the calculation, which is adjusted every two weeks. The average number of blocks in a period of time [will] equal a block about every ten minutes.”

Andreas stated that this would result in the 2016 blocks mined within a timespan of two weeks. He added that if the blocks mined the previous two weeks are exactly 2016, then the difficulty of solving the PoW algorithm and the amount of hash power committed by the miners for Bitcoin mining is perfect.

The author further stated:



“Let’s say that instead of 2016 blocks, we had 2217 blocks, or effectively 10% more blocks. The network [would adjust] the difficulty [to be] 10% [more difficult], the same ratio as the [percentage] of extra blocks we had versus the number of blocks we should have.”

Andreas continued to say that if there was a difference of 10%, then the difficulty target will also be adjusted by 10%, because of which 10-minute blocks would be “closer” in the future. He further elucidated the result if it was 10% lower, stating:

“[…] 10% short, we would adjust by about 10% in the difficulty target. That calculation happens every two weeks, at exactly the same block, and affects the difficulty of the next block across the entire network [of nodes].”

The Bitcoin proponent stated that every computer in the network counts the number of blocks noticed over the past two weeks, measuring the amount of time between the blocks, and adjusts the difficulty in accordance, “and arrives at the same answer, as the entire network switches [the difficulty target]. For the exact same amount, every two weeks.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin price prediction: BTC prices primed for small correction that could evolve into a major correction

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Bitcoin prices primed for a small correction which could evolve into a major correction
Source: Unsplash

Bitcoin has been on a parabolic bullish rally for quite a while, which was followed by sideways movement of the price. However, at press time, the pattern formed indicated an imminent correction.

At press time, Bitcoin was priced just below $8,000, i.e., $7,979 and had a market cap of $141 billion. The dominance of Bitcoin had reduced as the rally ceased and stood at 57%.

Descending Triangle Pattern

Source: TradingView

As seen in the chart above, Bitcoin’s prices are enclosed in a continuation pattern, i.e., a descending triangle, which is a bearish pattern for Bitcoin. The volume for the same can also be seen decreasing over the course of the pattern, which affirms the above pattern.

When the pattern unfolds, the price will break out of the pattern and head downward; the only thing stopping the price from dipping is important resistance points. The price is likely to hit $7,820 level after the breakout, however, if the former level fails there are subsequent resistance points at $7,674, $7,529, and $7,256, which will be tested in that particular order.

A possible Double Top in the formation?

The above breakout is a short-term movement of price, however, on a longer time frame, the price is stuck in limbo, which explains the sideways movement. The parabolic rally was quick which is why most prominent traders, including Peter Brandt, Tone Vays, and others, are expecting a correction, that is overdue.

Source: TradingView

In the above chart, the way the price of BTC is moving suggests the possibility of the formation of a double top. However, the pattern is only confirmed after the price breaks the lowest resistance, i.e., $7,529. After which, the price will decline quickly into a correction that is being expected by most of the traders in the crypto space.



There is however a scenario where the price might just take off from here since it’s is undergoing a sideways movement, which can also be treated as an accumulation phase.

Conclusion

Crypto Twitter is quite bullish on Bitcoin and expects it to continue the rally, however, technical analysts and traders are awaiting a correction. According to Tone Vays, the price of Bitcoin will reach $4,500 before proceeding to a bull rally; Peter Brandt is also awaiting a pullback. No matter the outcome, it is better to tread carefully or stick to stacking sats.





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