Bitcoinâs mining difficulty hit an all-time high today after a roughly 6% increase, a move that follows a record month in earnings for Bitcoin miners as new-generation ASICs come online.
âDifficultyâ refers to the relative measure of the amount of resources required to mine bitcoin. This measurement climbs or falls depending on the amount of power consumed (or âhashrateâ produced) by the network at a given time. Bitcoin is programmed to adjust its difficulty level every 2,016 blocks, or roughly every 2 weeks to ensure that new blocks are mined at a stable rate.
This difficulty is measured on a relative scoring scale where Bitcoin launched with a mining difficulty of â1,â the lowest itâs ever been. (Difficulty kind of works like Google Search scores in that the scoring system is internal and has no reference point or unit for measurement outside of the networks themselves).
As of todayâs adjustment, Bitcoinâs current mining difficulty is 23.1 trillion, according to data pulled from this CoinDesk journalistâs Bitcoin node. Per figures from BTC.com, this is a roughly 6% increase from its last level of 21.8 trillion, which makes it the second largest adjustment of the year and the fifth upward adjustment in the last six difficulty periods.
The difficulty adjustment is arguably one of Bitcoinâs most important features as it ensures block times remain relatively stable while also preventing a large miner from eating up too much hashrate.
This latest adjustment is a notable bump, Compass mining CEO Whit Gibbs told CoinDesk, because itâs likely attributable to tens of thousands of new machines coming online that were previously on backorder in the ASIC supply chain.
He said the current adjustment is just a sampler of the flood of hashrate that will come online in 2022 as more backordered shipments are filled.
âTodayâs moderately large difficulty increase is not surprising, and I expect itâs only a taste of what will come later in this year and into 2022, as delayed machine shipments start arriving and being deployed. The pending flood of hashrate about to enter the market will only continue pushing bitcoinâs mining difficulty higher, which should track with bitcoinâs price,â Gibbs said.
As bitcoinâs price has gone stratospheric, mining investments are shooting the moon along with it. North American miners like Hut 8, Marathon, Blockcap and others have used 2021 as an opportunity to aggressively expand operational capacity. As these machines come online, Bitcoinâs hashrate and difficulty are rising in step with miner revenues, which hit a record $1.5 billion in the month of March.
