What is the effect of the rising BTC mining difficulty on the industry?

The Bitcoin mining difficulty has been on the rise for a long time now. in 2023 it will have four new ones so far all time highs and it doesn’t seem to be satisfied with that. According to data from CoinWarz the difficulty will be 78.89 trillion tomorrow hashes rise to 48.53 trillion hashes. Every 20,019 blocks, which is about two weeks, this difficulty is adjusted to keep the block production speed of the Bitcoin blockchain around ten minutes.

What is the effect of this ever increasing difficulty on the mining industry?

BTC mining just keeps getting harder

As mining bitcoin (BTC) becomes increasingly difficult, more sophisticated technology and overall computing power is required to produce the same amount of bitcoin. This can be hard on miners, especially during a bear market. Now that the price is a lot lower than the all time high of $69,000, some miners are therefore struggling to make a profit and have been forced to sell or completely close their crypto reserves.

But now that the bitcoin price has risen sharply since the turn of the year, the revenue of the miners has also received a boost and therefore they currently have more breathing room.

Las Vegas-based lesser CleanSpark has indicated that rising mining difficulty is likely to lead to industry consolidation. Talyr Monnig, CleanSpark VP of mining technologynamely said the following:

“Unless there is a big price hike, I think the smaller mining companies will be bought out by bigger companies or close their doors.”

Impact on mining industry remains limited for the time being

Tim Rainey, treasurer of New York-based cryptocurrency data center and power generation company Greenidge Generation Holdings, has indicated that no major change is expected with the increase in difficulty tomorrow, as most miners will still be able to hash price reach.

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The hash price is a measure that indicates the average price a mining machine makes on the Bitcoin network on a daily basis.

He added that this was more related to the recent price increase of BTC. So if the bitcoin price can sustain its upward trend somewhat, the increasing mining difficulty will not have a major impact on the overall industry.

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