Bitcoin difficulty hits its highest point in over a year: What should miners expect?
- Bitcoin mining difficulty recently reached close to 40.0T.
- The rise in network difficulty comes as price and hashrate saw a rise.
The remarkable ascent of Bitcoin [BTC] has been a topic of critical importance in the broader cryptocurrency community. Not surprisingly, the price increase seen by other coins and tokens followed the king coin’s price increase.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Bitcoin Network difficulty inches close to 40.0T
As the price of Bitcoin experienced a significant surge recently, so did its network difficulty. Blockchain.com’s stats showed that difficulty had been increasing consistently over the past few weeks. At the time of writing, the network difficulty was very close to 40.0T, and the current level was the highest in more than a year.
The Bitcoin network difficulty is a metric for gauging the difficulty of mining new blocks in the Bitcoin blockchain. To keep blocks being mined on average every 10 minutes regardless of fluctuations in processing capacity on the network, it makes adjustments every 2016 block (about every two weeks). It becomes more challenging to mine a block as the difficulty increases, and vice versa.
Why the difficulty is on the rise
Adding extra computing power (hash rate) to the Bitcoin network increases the network’s difficulty, making it harder for miners to solve the cryptographic puzzle needed to mine a block. In order to keep the average time to mine a block at 10 minutes, regardless of fluctuations in the hash rate, the difficulty adjusts itself accordingly.
The current Bitcoin hashrate indicates an increase in computing power. After the hashrate dropped in December 2022, observed data revealed a surge in January 2023, indicating a higher monthly contribution.
The Bitcoin network has seen over 269,000 TH/s as of this writing. The growing value of Bitcoin has been a big incentive for miners to improve their hashrate. With a greater Bitcoin price, mining becomes more lucrative, drawing in more miners to the network.
A look at BTC price move
Bitcoin has increased by over 37% from the start of its surge to its present price. Its price increased by almost 50% at the peak of its surge. As of this writing, it had dropped nearly 4% in the previous trading period and was trading at around $22,900 at press time.
According to the Relative Strength Index (RSI), the market was in a bull run in the time period, but the line revealed that it had slightly descended from the overbought region.
In addition, despite the daily timeframe’s zigzag movement, a support level was being formed for the price of Bitcoin at press time. Support has been provided up to this point at approximately $22,000.
How much are 1,10,100 BTCs worth today?
Possible upsides and downsides to rise in network difficulty
The network becomes more secure as the hash rate and difficulty increase because it becomes harder for an attacker to influence the network. However, it can take more time to mine a block, which might cause higher costs and worse profitability.
As of this writing, the Miners Revenue was about $20 million, a rise from what was possible in December 2022.