‘Brace yourself!’ Bitcoin difficulty could hit record this week

The bitcoin (BTC) price may be having great difficulty at the moment, the miners seem to have a positive outlook for the future. This is evidenced, among other things, by the increasing hash rate and difficulty. In about two days, the latter is likely to see its biggest increase since January this year, a positive sign. However, there are some snags in the short term.

Bitcoin miners are recovering

The recent downward price action has had a major effect on all market participants. Where many investors saw their bitcoins become worth much less, miners also had a hard time. Due to the falling price in combination with the rising energy prices, the profitability for miners was increasingly at risk.

The bitcoin mining company Blockbridge lets in a update know yesterday that these negative conditions are especially a big hit for miners who use older, inefficient machines.

Now that miners seem to be recovering somewhat and the hash rate is rising, the difficulty will also rise this week. That increase will expectation amount to 7%. That’s the biggest positive adjustment since January 2022. In fact, it’s such a big adjustment that the difficulty is a all time high (ATH) can put down.

Bitcoin miners are facing tough times

They are positive signals. The rising hash rate shows that miners are either turning on more efficient machines, or new miners entering the market. The rising difficulty is also good for the security of the Bitcoin network. However, the latter is not necessarily a good development for miners, Blockbridge says:

“We can see the difficulty jump enough to hit a new (or nearly new) ATH in a few days. It’s great for network security, but unfortunately also means a declining hash price, especially with bitcoin’s price drop following Powell’s speech on Friday. If you remember our last update, the average cost of mining increased by 22% in the second quarter. Brace yourself for tougher weeks ahead as profitability comes under pressure!”

The difficulty is an automatic mechanism that aims to limit the time between transaction blocks to 10 minutes. If more miners join the network, transaction blocks will be processed faster than the intended 10 minutes. In that case, the difficulty goes up and it becomes more difficult to mine bitcoins. This works the same the other way around; If it takes longer than 10 minutes for a transaction block to be processed, the difficulty goes down.

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