Bitcoin, a proof of work (PoW) blockchain, relies on its mining process to ensure the security and stability of its network. This includes the activities of miners who use specialized mining machines and electricity to operate bitcoin nodes.
Over the years, mining attracted various miners when BTC prices were high. However, BTC mining difficulty and network hash rate play their part in block rewards.
From a recent report, BTC mining difficulty is set to hit a new 7-month high this week. The trend of movements is making an adjustment for the leading global cryptocurrency from sequential information gained over the years.
BTC mining difficulty adjustment will happen every 2,016 blocks. But the network has seen this price drop over the years, especially during the summer season. Also, restrictions on mining in countries such as Iran and China contributed to the decline due to high energy consumption.
Adjustment in bitcoin mining difficulty is critical to the functionality of the network as a blockchain. This is because it defines the ease or difficulty of the mining process on the network based on the number of miners working on the blockchain.
Typically, with more miners working on the network, it becomes more difficult to get rewards and vice versa. The adjustment process ensures that there is no change in new block production for bitcoin at all times. Furthermore, its stability is not affected by the number of miners active on the blockchain.
The bitcoin network has seen various turning points in its mining difficulty. In 2022, BTC continued to make separate negative adjustments until mid-summer. The most important data of about -5.01% on 21 July marked its lowest level over the previous year.
Bitcoin Hash Rate Pushes Up
However, there is a turnaround for a positive increase as the price reaches 1.74% in early August. This is followed by another increase of 0.63% two weeks later.
The subsequent adjustment will take place in less than two days and could represent an increase of around 7% according to BTC.com data. If this happens, it will become the most comprehensive data block for the past seven months.
Apart from the difficulty of bitcoin mining climbing upwards, the hash rate also follows the same pattern. This is due to the correlation between BTC mining difficulty and its hash rate. Typically, an increase in mining difficulty equals an increase in hash rate and vice versa.
Data from BitInfoChart revealed a drop in the BTC hash rate. It fell from its ATH of 250EH/s in early June to 170 EH/s after two months. But the hash rate has shown a slight improvement as it surged to 230EH/s, which represents an increase of 30%.
Featured image from Pixabay, Charts from TradingView.com