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Bitcoin mining difficulty spikes and hurts miners

Crypto miners sell record amount of Bitcoin

Bitcoin miners have put a lot of extra equipment to work in the past two weeks as it has become more difficult to mine Bitcoin again. The difficulty for Bitcoin mining has increased by 9.26 percent during the last adjustment. A development that could possibly cause problems for miners, especially with the current prices.

What is the difficulty?

The difficulty determines for the Bitcoin network how much computing power is needed to find a new block. Bitcoin’s computer code states that miners must find a block every 10 minutes on average. If the average block time for the last 2,016 blocks is less than 10 minutes, the difficulty level goes down and vice versa. Over the past 2,016 blocks, miners were on average 9.26 percent faster than that target time of 10 minutes.

This has now resulted in an increase in difficulty, which means that miners will have a harder time finding blocks. When you read something about the difficulty or difficulty adjustment in relation to Bitcoin, it is always about this topic. At the time of writing, the difficulty is at its highest point since January 2022, with a score of 30.97 trillion and a hashrate of 230 exahash per second.

Bad news for miners

In principle, it is a good sign that the hashrate in the network is increasing, because that means that miners have confidence in the future. Increasing the difficulty is the natural consequence of this, but it is not really good for the miners. This means that the same computing power will yield them less Bitcoin after the difficulty level is adjusted. If you combine that with the ailing Bitcoin price, you understand that problems can arise.

Many miners have already had to sell parts of their reserves during the bear market of 2022 and if the price continues to behave as it is now, things do not look good for the rest of this year. From its all-time high of $69,044, Bitcoin has already lost more than 70 percent at its current rate.

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