Bitcoin (BTC) Mining Difficulty Hits New Record High as Miners Become More Powerful

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Wed, 01/15/2020 - 14:24
Alex Dovbnya

The Bitcoin (BTC) mining difficulty reaches a fresh record high of 14.78 trln

Cover image via 123rf.com
Contents

On Jan. 15, the Bitcoin (BTC) mining difficulty skyrocketed to a new all-time high of 14.78 trln.

Alejandro De La Torre, the vice president of the number one mining pool Poolin, points to the fact that the new increase in the mining difficulty is attributed to miners ramping up their hashrate. The new generation of mining rigs is estimated to be four to five times more powerful than the previous one. 

image by @bitentrepreneur

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Miners are hogging more power  

The Bitcoin mining difficulty adjusts every 2,016 blocks based on how many miners are using the network and how long it takes to find the above mentioned amount of blocks. This is a genius way of preventing miners from producing too many coins or closing down shop due to different market conditions. 

With each positive adjustment, it becomes more challenging to validate a new block. Industrial-scale miners need more sophisticated hardware to be able to stay competitive and turn a profit. Meanwhile, run-of-the-mill miners have been essentially kicked to the curb.   

That said, the higher the difficulty, the more secure the Bitcoin network is. On top of that, the intrinsic value of Bitcoin increases with the cost of computational power. 

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Mining difficulty and hashrate

As of recently, Bitcoin's hashrate, the metric that shows the total processing power of the network, has been rising in tandem with difficulty. On Jan. 7, it reached yet another all-time high of 120 EH/s, according to data provided by Blockchain. 

image by blockchain.com

The hashrate and difficulty tend to move in tandem but that's not always the case. As reported by U.Today, the Bitcoin difficulty dropped by seven percent on Nov. 8, which was seen as a harbinger of impending miner capitulation by some market analysts. However, this was never followed by a drop in the hashrate. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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