Miners of Bitcoin (BTC) are preparing for another increase in the difficulty of the cryptocurrency’s mining process this week. This comes as the amount of computational power needed to mine new coins approaches its highest level ever recorded.
According to projections made by CoinWarz, a provider of cryptocurrency mining data, the next difficulty adjustment, which is due to take place on Friday, March 10, will raise the difficulty level from 43.05 T to 44.46 T. This change is anticipated to take place.
The forthcoming increase will bring the difficulty of generating new Bitcoin to a level that is beyond anything that has ever been seen before in the history of the cryptocurrency. Despite the fact that it has already reached an all-time high, the degree of difficulty has been steadily increasing since the second half of the year 2022. This is in spite of the reason that it has already reached an all-time high.
Hashrate continues to rise
It is common practice for increases in the difficulty level of Bitcoin mining to follow increases in the hash rate on the network. The hash rate measures the total amount of computational power that is allocated to the mining of Bitcoin across the globe. The complexity of mining increases in tandem with the hashrate of a network in order to keep the interval between newly mined blocks on a blockchain to an average of ten minutes.
Since the month of June 2021, the hashrate of the Bitcoin network has been steadily increasing. This year, in late January, it achieved an all-time high of approximately 300 EH/s for the first time, and then, in late February, it reached another all-time high of approximately 400 EH/s.
According to statistics obtained from CoinWarz, the hashrate recently came within striking distance of its all-time high on March 2, when it reached 385 EH/s.
An increase in the network’s hashrate is seen as an indication of increased adoption, which in turn strengthens the Bitcoin network’s security and resistance to a variety of different types of attacks. Bitcoin is widely regarded as the cryptocurrency that offers the highest level of safety on the market today for this very reason.
The increase in difficulty will unavoidably have the effect of cutting into the profit profits that miners make, and this effect will be direct and immediate. It should come as no surprise that following a bear market that has now lasted for more than a year could prove to be challenging for many of the largest mining businesses in the world.
Riot Blockchain, a large Bitcoin miner that is publicly traded, said in its earnings report earlier this month that its mining business lost more than $500 million in 2022. Despite the fact that the company produced a much greater quantity of Bitcoin in 2022, the loss was significantly higher than the $15.4 million loss it recorded for 2021.
It’s still not clear how Riot and other large mining companies will deal with the fact that Bitcoin mining is getting harder and the cost of electricity is going up.
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