July 21, 2024
Bitcoin News

Bitcoin’s Mining Difficulty Hits All-Time High

Don’t look to the price of Bitcoin (BTC) to understand why mining seems to be becoming increasingly popular. Despite the cryptocurrency’s recent subpar price performance, Bitcoin’s mining difficulty has reached a new all-time high.

The level of mining competition is referred to as mining difficulty for Bitcoin. As more mining units are deployed, the difficulty increases, suggesting that the activity is still a lucrative and well-liked business.

The mining difficulty for Bitcoin is 55.62 trillion hashes, according to data from CoinWarz. On July 17 of this year, the network reached a remarkable peak of 53.9 trillion hashes. Despite the achievement, the current state of the markets is somewhat different.

After Chinese real estate company Evergrande’s filing for Chapter 15 bankruptcy in a Manhattan court last week, which forced some investors to sell their most speculative assets, investor attitude towards Bitcoin took a poor turn.

According to CoinGecko, the price of Bitcoin dropped 10.8% over the previous seven days to trade just under $26,000 on Wednesday.

Though the mining industry grows slowly, favourable indicators like its increasing difficulty or hash rate are often unresponsive to Bitcoin’s price.

This is because the majority of the rigs that went online on the last day were purchased in advance.

Events like China’s crackdown on cryptocurrency miners in 2021 or a cold wave in North America last winter that caused some grid issues and forced several major miners to shut down or reduce power can drastically lower the statistic.

However the data typically indicates a noticeable upward change when those machines migrate or come back online.

In general, the complexity of mining keeps increasing each year. This is because more machines are installed annually than are shut down.

The hash rate is another indicator that has increased recently and continues to increase annually. The Bitcoin network’s hash rate serves as a gauge of its processing power.

To authenticate logs of network transactions known as “blocks” that are later added to Bitcoin’s immutable distributed ledger system, Bitcoin mining rigs employ their processing power to crack codes. Bitcoin is used to compensate miners for their efforts.

Every time someone tries to break the encryption, a “hash” code is created. The reward and addition to the blockchain go to the first miner who transmits a candidate block’s valid hash. Thus, miners are motivated to work rapidly.

A clear indication of the computational capacity of the network is the number of attempts (or hashes) that Bitcoin miners may make to crack the code in a second, which increases as the hash rate rises.

At the moment, Bitcoin attempts to break codes 446 quintillion times per second. The network was doing about 486 quintillion attempts per second earlier this month, so this is high but not quite as high.

Image: Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

Related posts

Vancouver’s Hive Digital Raises $22M to Boost Bitcoin Mining Footprint

Christian Green

MicroStrategy Bolsters Bullish Stance with $147 Million Bitcoin Purchase

Eva Moore

Bitcoin ATM Network Sees First Decline Since July 2023

Robert Paul

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Please enter CoinGecko Free Api Key to get this plugin works.