In the fast-paced realm of Bitcoin mining, a significant rise is expected in the upcoming difficulty adjustment, which is slated to swing upwards between 4.74% and 7.7%, thereby offsetting the recent 3.26% reduction observed on June 28, 2023, as per data recorded on July 9, 2023.
To offer a brief primer, Bitcoin mining involves computers solving complex mathematical problems, a process that helps validate transactions on the Bitcoin network. The difficulty adjustment, which occurs approximately every two weeks, alters the complexity of these problems based on the total computational power or hashrate of the network. A higher hashrate necessitates an increase in difficulty, to ensure the time taken for each block remains around 10 minutes.
Bitcoin’s last difficulty alteration was a rare downward adjustment, the first in 56 days, which happened at block height 796,320 on June 28, and diminished the network’s difficulty from the record high of 52.35 trillion to 50.65 trillion hashes per second. This adjustment initially seemed to signal a more relaxed period for Bitcoin miners, following two weeks of soaring hashrates and rapid block intervals.
However, the scenario abruptly changed post-June 19, when a decline in the hashrate resulted in slower block intervals, instigating the drop in difficulty. As of June 29, the total network hashrate had fallen below the 300 exahash per second (EH/s) range twice within the previous two weeks, even though the average hashrate was around 360.9 EH/s. Consequently, the next difficulty retarget was set for July 13, 2023.
The present mining landscape sees Foundry USA leading the pack with a contribution of a substantial 117.21 EH/s, approximately one-third of the total hashrate for the past three days. Other significant players include Antpool, F2pool, Binance Pool, Viabtc, Luxor, and SBI Crypto. As of June 29, 41 mining pools were seen to dedicate hashrate to the Bitcoin network.
Subsequently, Bitcoin’s network hashrate recorded a new 24-hour high on July 8, topping 538 EH/s at block height 797,733. This increase in hashrate, which drives up the pace of block intervals, is part of the reason behind the anticipated upswing in the upcoming difficulty adjustment.
The impending surge in difficulty, which is expected to range between 4.74% and 7.7%, will wipe out the recent decrease experienced on June 28 and push the overall network difficulty to a new record high. If the increase edges towards the lower end of the range, the difficulty will jump from the current 50.65 trillion to 53.04 trillion hashes per second, setting a new precedent for the complexity of uncovering BTC blocks.
Despite the imminent challenging period, the recent hike in the price of BTC, which surged by 80% against the U.S. dollar in H1 2023, has kept Bitcoin mining an attractive venture. Further bolstering this is the advent of next-gen ASIC mining rigs offering a significantly higher hashrate and better efficiency. Mining operations that weathered the ‘Crypto Winter’ of 2022 have also considerably expanded their operations, deploying thousands of BTC miners across new facilities. The world of Bitcoin mining, it seems, continues to bustle with relentless energy.