Tue 05 Nov 2024 ▪
5
min reading ▪ by
Evans S.
Bitcoin mining difficulty recently reached an unprecedented milestone: 100 trillion. This feat, unimaginable just a few years ago, symbolizes both the robustness and the growing complexity of the network. But behind this record lies a sometimes cruel reality for miners and a constant adjustment to maintain balance. So why this difficulty adjustment, and what does it mean for the future of the flagship cryptocurrency? Let’s go behind the scenes of this technological escalation.
The mining race: between record difficulty and raw power
Last Tuesday, Bitcoin mining difficulty jumped 6.2%, crossing the 100 trillion mark for the first time. This difficulty is an indicator: the higher it is, the more complex the Bitcoin network becomes to secure.
Miners, in this technological race, must compete in computing power to solve equations and validate each block.
This jump in difficulty is no accident. Last week, the Bitcoin network recorded a record hash rate of 750 EH/s (exahash per second) on average over seven days, a staggering level of computing power.
This record indicates not only the commitment of miners, but also the increasing industrialization of bitcoin mining. Miners have intensified their efforts, investing in cutting-edge infrastructure, even if it means excluding smaller players, unable to keep up with this rise in power.
The difficulty adjustment, carried out automatically every 2016 blocks, guarantees the regularity of the network: a new block every ten minutes, whatever happens. In this case, miners were recently extracting a block every nine minutes and 27 seconds, hence this necessary increase in difficulty.
The impact of difficulty on miners: when the reward becomes scarce
With this increase in difficulty, each miner sees their energy costs explode, and the stakes become more and more selective.
After bitcoin’s latest April halving, which halved the block reward to 3,125 BTC, miners had to deal with reduced margins. As a result, overall revenues fell, forcing less efficient miners out of the market.
The pressure is so great that many have thrown in the towel, while public miners, often more resilient, continue to invest to maintain their place.
It is mainly these big players – often American – who are strengthening network security today, with large-scale mining operations and machines constantly renewed to maximize their efficiency.
Furthermore, the “hash price” – or the expected revenue per unit of hashing power – fell to its all-time low of $0.04 per TH/s in September, before timidly rising to $0.045. In other words, each unit of calculation becomes less profitable, forcing miners to review their strategy.
Towards a new era for Bitcoin: the challenges of ultra-concentration
With the Bitcoin price currently hovering around $68,694, mining dynamics reveal a market consolidation trend.
“Traditional” miners find themselves competing with diversified players in areas like AI, such as Core Scientific or Terawulf, who dominate the stock rankings, leaving miners exclusively focused on Bitcoin behind.
In 2024, the race is no longer just for whoever has the most raw power, but also who knows how to adapt. The difficulty that has just crossed 100,000 billion is only the beginning: the architecture of Bitcoin, designed to withstand any fluctuation, will continue to demand more power and ingenuity from its miners.
In short, crossing the 100,000 billion wall is a bit like climbing Everest in the middle of a blizzard. The most seasoned miners remain standing, while others, already exhausted by rising costs, drop out. One thing is certain, Bitcoin never rests, and this epic journey to the next difficulty has only just begun. Meanwhile, Ripple is about to unleash a devastating sell-off!
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Evans S.
Fascinated by bitcoin since 2017, Evariste has continued to research the subject. If his first interest was in trading, he is now actively trying to understand all the advances centered on cryptocurrencies. As an editor, he aspires to continually deliver high-quality work that reflects the state of the industry as a whole.
