Bitcoin’s Mining Difficulty Sees Its Largest Jump in 12 Months as BTC Network Competition Rises
According to recent data, Bitcoin mining difficulty has seen its largest two-week increase in the past 12 months.
The mining difficulty, as the name suggests, is a measure of how hard it is to win mining rewards. Data gathered from BTC.com shows that mining difficulty soared all the way up to 9.06 trillion (T) on July 9th.
This was at around 9.17 UTC, at block height 584,640. The surge managed to break the previous record which sat at 7.93 T. The new record is 14.23% higher than the previous one, which indicates the strongest growth in any two-week period in the past 12 months, meaning from August 2018.
Bitcoin Miners are Returning, with Greater Interest than Ever
If there was ever a need for an indication that the Bitcoin miners are returning, this is it. In fact, this development does not only show that the miners are back and that competition is once again growing — it also shows that it is growing at a rapid pace.
As some may know, Bitcoin's network was designed in a way that allows it to adjust mining difficulty after every 2.016 blocks have been mined. At the usual rate, this would mean that it is changed once every two weeks. The mining difficulty would change depending on a few factors, including the participating mining power in each cycle. That way, it will make sure that blockchain-production in the next period would remain at 10 minutes per block.
As mentioned, changes happen in accordance with the previous performance. If there are fewer miners trying to solve the hash function of the network, the difficulty drops in order to let them do it easier. However, as soon as more miners start participating, the difficulty grows in order to make mining roughly a 10-minute long challenge.
The current difficulty is higher than ever before, and it has been on a constant rise ever since December 19th of this year. However, as time went by, the difficulty would grow faster and faster in a lesser amount of time. BTC.com's analysis of the pattern estimates that the next adjustment will see the difficulty break yet another record, and likely surge as high as 10.35 T. This would be another 14.17% growth if things remain as they are right now.
Computing Power Surges as Well, and will Likely Grow for Months
Of course, the mining difficulty is not the only aspect of the mining process that had surged. The necessary amount of computing power did as well, behaving similarly to the mining difficulty itself. It is safe to say that Bitcoin mining is an enthusiastic venture these days. It is also expected that the growth would continue, at least until the weather changes.
With most of the mining farms being located in China, and the country currently being in its rainy summer season, many are taking advantage of the cheap electricity that the weather and the environment end up producing. The peak rainy season is still months into the future, meaning that miners will be able to keep using cheap electricity for months to come. With that in mind, it is unlikely that the situation is about to change anytime soon.
Just like crypto prices, the mining difficulty of Bitcoin also saw a massive hit last year, when coins started losing value. From October until December, the mining difficulty dropped by around 30%, as this was the period when most miners were reportedly leaving the sector.
The situation has changed in early 2019, and the change includes all aspects of the coin, mining included. Further, with Bitcoin price surging, the mining is expected to follow, although many suspects that it is still nowhere near being high enough to match the price.