Bitcoin Mining Difficulty Hits 8-Month High as Price Falls

Bitcoin Mining Difficulty Hits 8-Month High as Price Falls

Even though Bitcoin’s (BTC) price has fallen below $20,000 in the past six weeks, the underlying network fundamentals are not particularly bleak. This new information emerges as the crypto market as a whole experiences another price swing, driving the worth of most cryptocurrencies and tokens lower.

Recent on-chain metrics show that both the hash rate and the mining difficulty are steadily rising and show no signs of slowing down anytime soon.

As with other markets, Bitcoin had a rough year in 2018. The token, like many others, has been on an erratic upward and downward trajectory for some time now.

There is Statistical Support for the ‘Rough Ride’ Increase in Difficulty

A 7% drop in BTC/USD over the past week has not deterred miners. The miners, meanwhile, have finally finished their months-long period of capitulation.

Important metrics are trending rising as network rivalry increases toward the end of August. Next week, the difficulty rate is projected to increase by 6.8%, which is a reflection of this trend. Also, this is because miners are competing for block rewards.

According to data compiled by the on-chain tracking tool, this will be the largest upward difficulty shift since January of this year. Moreover, the difficulty will reach new all-time highs under the current conditions if the 6.8% increase occurs.

Blocksbridge, a Bitcoin mining consulting firm, claims that a significant increase in difficulty could lead to yet another record high. In a press release dated August 27th, the firm announced that the newest issue of “Miner Weekly” would be available that day.

Blocksbridge, though, stressed that the current environment was challenging for everyone involved in the network.

For example, those who relied on older technology suffered the most as spot prices dropped.

Additionally, the situation is exacerbated by the decline in value of block subsidies and fees in comparison to costs such as power.

There has been a record-breaking increase in the hash rate.

As the Bitcoin network seeks for more positive numbers, the hash rate seems to follow suit with difficulty in a renewed push for new heights. According to MiningPoolStats, the hash rate peaked at 251 EH/s in late April, before dropping to 246 EH/s on August 22.

To elaborate, a machine’s hash rate is the rate at which it can perform hashing operations. Hash rate is a measure of how efficiently and effectively a Bitcoin mining machine is operating.

The value here defines how quickly a mining device will try to calculate a hash for a query. Multiple hashing operations are necessary to produce a valid hash.

This means that in order to generate a hash, a Bitcoin miner must first process a very large quantity of data using a hash algorithm. If a certain hash value is generated during mining, it is deemed successful.

As a result, the hash rate correlates with the earnings of an individual miner or mining pool. Having a higher hash rate increases your chances of mining a block and getting the associated reward.

However, the hash rate is still just an estimate, and its numbers don’t reflect any real-world changes or movements in mining activity.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.