Bitcoin mining difficulty continued to stride up over the past three months, hit an ATH of 16.55 TH/s

By Selena On Mar 10, 2020

Bitcoin’s value has been getting slashed since 8 March, BTC price fell by 15.75% and was at $ 7,941. The bear attack has many experts and traders alike thinking that prosper the right time to buy the dip. Bitcoin has managed to increase, decrease and adjust itself within three months, and was once again re-visiting its depths. However, Bitcoin mining difficulty and Bitcoin hashrate have continued to rise sharply over the past three months.

Tomorrow’s #bitcoin difficulty adjustment (which keeps time between blocks at 10 minutes, regardless of hashrate) will be a massive +7%! No sign of weakness 2 months before the halving. ? https://t.co/zMdxlteR6Z pic.twitter.com/xtRYcQJgoD

— PlanB (@100trillionUSD) March 8, 2020

Bitcoin mining difficulty hit new highs and inefficient miners

Bitcoin’s difficulty stalled at the end of December 2019, but an increase in the hash rate triggered the difficulty to rise. According to data provided by BTC.com, mining difficulty stood at an all-time high of 16.55 TH/s.

Source: BTC.com

The state of the network and miners were reflected by hash rate and mining difficulty. As mining difficulty increased, the hash rate had recently marked an ATH at 136.36 TH/s.

Source: Blockchain.com

Bitcoin’s mining difficulty adjustment ratio is one of the key innovations behind the successful Nakamoto consensus. As the amount of miners increases or increases the difficulty of Bitcoin’s PoW increases or increases, every 2016 blocks. Today, Bitcoin’s difficulty has increased by nearly 7%. This means that as more miners add to the network’s hashing speed, the difficulty of PoW increases, making it harder to find new block rewards. If the mining companies stop mining, then the difficulty will be reduced to keep the balance.

#bitcoin

difficulty adjustment appr. +6,8% today.

I marked the adj. of 5%+ (relevant adj.) from 2015.

green = price higher/equal until next relevant Adj.
red = price lower until next relevant adj.

a relevant adj. doesn´t lead to higher prices in general but often. pic.twitter.com/wSJXOKfKRz

— ฿itcoin-Printer (@BitcoinPrinter) March 9, 2020

As the difficulty level increases, it makes the network much harder to attack. To attack the Bitcoin network, an attacker would have to provide more computing power than all the thousands of other computers currently mining Bitcoin combined. This type of attack becomes economically unfeasible as the hashrate increases. Smaller PoW chains with less hashrate are more vulnerable to attacks from malicious agents.

As the hash rate continued to rise, a market observer recently noted that four mining pools had the most considerable hash rate accumulation. The mining pools were Antpool, BTC-com, Poolin, and F2Pool, and they made up for> 50% of BTC’s hashrate. At press time, Antpool had 9.9%, BTC.com had 12.8%, Poolin had 16.6%, and F2Pool had the most significant 18.5% of the hash rate.

Source: BTC.com

Hashrate increase before Halving is considered to increase

Bitcoin Halving is coming, which means that the fear of decreasing block rewards is expanding. This makes mining companies unprofitable and causes a death spiral because of reduced hashrate, as capitulate miners. Besides, this also often makes smaller miners more profitable being absorbed by larger, more efficient companies.

The difficulty increase this close to the Halving is usually perceived as being extraordinarily bullish. The increased costs of producing new BTC and reducing supply increase price pressure, causing prices to rise. Miners who manage to stay in operation and survive the Halving, usually become more profitable as a result.

Much of the media hype surrounding the Halving often cause an onslaught of new users onboard, which raises the demand for BTC, which also drives up prices.

Although mining as an industry tends to concentrate when larger mining companies exist, and smaller mining companies die, they eventually become more profitable to encourage more miners. However, less frequent rewards are more valuable.

Read more: