Although under increased regulatory pressure, the cryptocurrency industry continues to grow and attract newcomers who recognize the opportunity to generate income through cryptomining, with their computing power, along with that of long-standing Bitcoin miners. data, recently reaching a new high. In fact, declining energy costs, newer and better mining machines, as well as modest price increases have all contributed to a surge in computing power produced by Bitcoin miners, which reached a record high on 31 May, according to Bloomberg’s June 1 report and BTC.com data retrieved on June 2.
Bitcoin mining difficulty. Fountain: BTC.com Specifically, this figure stood at 51,234,338,863,442 or around 51.23 trillion at the end of May, with an average daily hashrate of 422.24 EH/s. Meanwhile, the platform projects that the next estimated difficulty will rise to 51.29 trillion, showing an increase of 0.10%.
Why is the difficulty of mining increasing?
As the Bloomberg article highlighted, “the bi-weekly update posted an increase of 3.4% after another jump of 3.22% over the past period,” indicating that mining difficulty “has been on the rise with just two slight drops this year.” According to the article, “a steady rally in the digital asset this year, (…) a drop in electricity costs and a new wave of more efficient machines” have caused the new ATH in Bitcoin mining difficulty. As Wolfie Zhao, head of research at TheMinerMag, a research arm of crypto mining consultancy BlocksBridge, explained:
“Bitcoin miners enjoy cheaper electricity before the start of summer. (…) The newer and more efficient machines also generate more computing power with the same amount of energy”.
Measured on a scale from zero to infinity, mining difficulty refers to the level of difficulty miners face in verifying transactions, grouping them into blocks, and adding them to the blockchain. It rises and falls based on the number of competing miners in the network and corrects itself after every 2016 blocks. Typically, miners aim to find a new block every 10 minutes, and mining difficulty increases when miners validate new blocks more often than the average 10 minutes, while it decreases when they find new blocks less frequently. .
hashrate through the roof
At the same time, the more miners in a network compete for the correct hash, the higher the hashrate, and Bitcoin’s hashrate has also been growing, indicating an increasing number of miners in a network since the government banned cryptomining. of China in 2021. Indeed, the hash rate of the flagship decentralized finance (DeFi) asset recently skyrocketed to 350 million terrahashes per second (TH/s), up from 75 million at the end of 2021, at which had dropped dramatically shortly after the ban, according to the graph shared by Bitcoin Magazine on June 1.
Bitcoin Price Analysis
As it is, Bitcoin is currently changing hands at the price of $27,085, up 0.77% in the last 24 hours and 2.43% in the previous seven days, while recording a 5.52% decline. in the past month, as the most recent charts, retrieved by Finbold on June 2, indicate.
As the next Bitcoin halving approaches, which will halve the prize for mining new blocks, it is likely that more miners will join the effort, while current ones will step it up as they try to earn as much as possible before that. happen. Simultaneously, experts predict that the event will also trigger bullish price action for the original cryptocurrency.