Bitcoin miners are gearing up for a giant leap in difficulty this weekend. The so-called bitcoin mining difficulty is expected to increase between 9 and 10% around 7 pm tonight. This is evident from the estimates of BTC.com, Bitrawrand Brains. That could change during the day, but everything points to a sharp increase.
What does this mean for bitcoin?
In principle, this is not the best news in the world for most miners. They now finally have something to celebrate with the increase in the bitcoin price, but now have to swallow another increase in the difficulty. An increase in difficulty basically means there is more competition on the network. The more computer power there is in the network, the higher the difficulty.
The Bitcoin network automatically adjusts in this way, so that the processing of blocks in the blockchain always comes out at an average of 10 minutes. If Bitcoin did not do this, it would not be long before all 21 million Bitcoin are in circulation. The difficulty adjustment ensures that the issuance of new bitcoin remains predictable.
After the increase, the difficulty will reach a record above 37 T at an average hash rate of 266 exahashes per second. Miners have had a very difficult time for a long time due to the high competition, high costs and low price. However, this significant increase will further increase the pressure while miners have little or no reserves left to sell.
Other circumstances
Incidentally, the extreme increase of 10 percent cannot be fully attributed to the past two weeks. According to Daniel Frumkin, Braiins’ lead researcher, the increase is also due to the winter storms in the United States. Parties such as Marathon Digital and Hive Blockchain continue to install new machines, according to Frumkin. “But because of the winter storm, we couldn’t see any of that in the previous period, so we’re now seeing about three weeks of installations in one,” says Frumkin.
In addition, he thinks that some parties have also been lucky during the past two weeks. It is of course possible that they will luckily find some more blocks in a short time. That would mean we’re likely to see a drop in difficulty over the next period.