Bitcoin mining difficulty increased by 4% during the past day, reaching a high of 86.39 trillion hashes on April 10.
This uptick is consistent with the ongoing trend witnessed since the beginning of the year, highlighting the mounting computational challenges miners face on the leading digital asset network.
The increasing difficulty has occurred amid BTC’s rapid rise to more than $70,000 thanks to the bullish momentum fueled by spot exchange-traded funds and the impending halving event.
Mining difficulty
Bitcoin’s mining difficulty adjusts approximately every two weeks after completing 2,016 blocks. This critical process evaluates whether miners’ activities have resulted in shorter or longer block discovery times.
When mining difficulty increases, miners must allocate more computational power to mine a block. This surge indicates a rise in miners joining the network, intensifying the computational workload. Also, heightened difficulty contributes to a more robust blockchain, amplifying the energy needed to mount a network attack.
Simultaneously, the Bitcoin network’s collective hash rate is steadily rising, averaging 639 exahash per second (EH/s) over a seven-day simple moving average, according to hashrate index data.
It’s worth noting that despite the ongoing hash rate uptrend, Bitcoin’s hash price, the compensation miners receive per hash for their computational efforts, experienced a significant surge in the first quarter. This surge can be attributed to Bitcoin’s price skyrocketing by 67.0% during the quarter, far surpassing the growth in hash rate.
Halving event
Bitcoin’s upcoming halving, slated for around April 20, will slash BTC’s block reward by 50% to 3.125 BTC.
According to analysts at NYDIG, the event is more significant for miners than for the price of the flagship digital asset. They argue that the reduction in supply is relatively small compared to the asset’s trading volumes and the demands from the spot ETFs.
However, historical data indicates that while the halving may not trigger an immediate price surge, it plays a crucial role in shaping Bitcoin’s price cycles. So, with the current positive price performance before the halving, investors have grounds for optimism regarding Bitcoin’s future potential.
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