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The difficulty of Bitcoin mining has recently crossed an unprecedented threshold: 100 trillion. This feat, unimaginable just a few years ago, symbolizes both the robustness and the increasing complexity of the network. However, behind this record lies a sometimes cruel reality for miners and a relentless adjustment to maintain balance. So, why this difficulty adjustment, and what does it imply for the future of the flagship cryptocurrency? Let’s delve into the backstage of this technological escalation.
The race for mining: between record difficulty and brute force
Last Tuesday, Bitcoin mining difficulty jumped by 6.2%, surpassing the 100 trillion mark for the first time. This difficulty is an indicator: the higher it is, the more the Bitcoin network becomes complex to secure.
Miners, in this technological race, must compete in computing power to solve equations and validate each block.
This jump in difficulty is not a coincidence. Last week, the Bitcoin network recorded a hash rate of 750 EH/s (exahashes per second) on average over seven days, representing an enormous level of computing power.
This record not only indicates the commitment of miners but also the increasing industrialization of Bitcoin mining. Miners have intensified their efforts, investing in state-of-the-art infrastructures, even sidelining smaller players who cannot keep up with this surge in power.
The difficulty adjustment, performed automatically every 2016 blocks, ensures the regularity of the network: a new block every ten minutes, come what may. Recently, miners were extracting a block every nine minutes and 27 seconds, hence this necessary increase in difficulty.
The impact of difficulty on miners: when the reward becomes scarce
With this rise in difficulty, each miner sees their energy costs explode, and the stakes become increasingly selective.
After the last halving of Bitcoin in April, which halved the reward per block to 3.125 BTC, miners had to cope with shrinking margins. As a result, overall revenues declined, pushing the least efficient miners out of the market.
The pressure is so great that many have thrown in the towel, while public miners, often more resilient, continue to invest to maintain their position.
It is primarily these large players – often American – who today enhance the security of the network, with large-scale mining operations and machines constantly renewed to maximize their efficiency.
Moreover, the “hash price” – or expected revenue per unit of hashing power – fell to its lowest historical level of $0.04 per TH/s in September, before timidly recovering to $0.045. In other words, each unit of computing becomes less profitable, forcing miners to rethink their strategy.
Towards a new era for Bitcoin: the challenges of ultra-concentration
As the price of Bitcoin currently hovers around $68,694, the dynamics of mining reveal a trend towards market consolidation.
“Traditional” miners find themselves competing with diversified players in fields such as AI, like Core Scientific or Terawulf, who dominate stock rankings, leaving miners exclusively focused on Bitcoin behind.
In 2024, the race is no longer solely about having the most brute force, but also about who can adapt. The difficulty that has just crossed 100 trillion is just the beginning: the architecture of Bitcoin, designed to withstand any fluctuation, will continue to demand more power and ingenuity from its miners.
In summary, crossing the wall of 100 trillion is somewhat like climbing Everest in the middle of a blizzard. The most seasoned miners remain standing, while others, already worn out by rising costs, drop off. One thing is certain, Bitcoin never rests, and this epic journey towards the next difficulty is just beginning. Meanwhile, Ripple is about to trigger a devastating sell-off!
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Fasciné par le bitcoin depuis 2017, Evariste n’a cessé de se documenter sur le sujet. Si son premier intérêt s’est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l’état du secteur dans son ensemble.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
