Although it is under increased regulatory pressure, the cryptocurrency industry continues to grow and attract newcomers who recognize the opportunity to create income through crypto mining, with their computing power, along with that of longstanding Bitcoin (BTC) miners, recently hitting a new all-time high (ATH).
Indeed, declining energy costs, newer and better mining machines, as well as modest price increases have contributed to a rise in the computing power churned by Bitcoin miners, which reached a record high on May 31, according to the June 1 report by Bloomberg and BTC.com data retrieved on June 2.
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 amount to 51.29 trillion, demonstrating a 0.10% increase.
Why is mining difficulty rising?
As Bloomberg’s article stressed, “the bi-weekly update posted a 3.4% increase after another 3.22% jump during the last period,” indicating that the mining difficulty “has been on the rise with only two slight declines this year.”
According to the article, “a steady rebound in the digital asset this year, (…) a drop in electricity costs, and a new wave of more efficient machines” have all prompted the new ATH in Bitcoin mining difficulty. As Wolfie Zhao, head of research at TheMinerMag, a research arm of crypto mining consultancy firm BlocksBridge, explained:
“Bitcoin miners are enjoying cheaper electricity before heading into the summer. (…) 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 that miners face in verifying transactions, clumping them into blocks, and adding them to the blockchain. It increases and decreases based on the number of miners competing on the network and corrects after every 2,016 blocks.
Typically, miners target to find a new block every 10 minutes, and mining difficulty grows when miners are validating new blocks more often than the average of 10 minutes, whereas it declines when they find new blocks less frequently.
At the same time, the more miners on a network competing for the correct hash, the higher the hashrate, and Bitcoin’s hashrate has been growing as well, indicating a rising number of miners on a network since a ban on crypto mining instituted by the government of China in 2021.
In fact, the hashrate of the flagship decentralized finance (DeFi) asset has recently soared to 350 million terrahashes per second (TH/s), up from around 75 million in late 2021, to which it had deeply declined shortly following the ban, according to the graph shared by Bitcoin Magazine on June 1.
Bitcoin price analysis
As things stand, Bitcoin is currently changing hands at the price of $27,085, up 0.77% in the last 24 hours and 2.43% across the previous seven days, while recording a decline of 5.52% over the past month, as the most recent charts, retrieved by Finbold on June 2, indicate.
As the next Bitcoin halving event nears, which will cut in half the award for mining new blocks, more miners will probably join the effort, whereas the current ones will intensify it as they try to earn as much as possible before that happens. Simultaneously, experts predict that the event will also trigger a bullish price action for the maiden cryptocurrency.
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