The Bitcoin network mining difficulty continues to trend higher as more time progresses. As this difficulty adjusts every two weeks, it is a clear sign of overall network health. At the same time, the overall hashrate is still volatile, which isn’t entirely unexpected.
Bitcoin Mining Difficulty Hits a new High
Considering how Bitcoin’s mining difficulty is determined by the target time of 10 minutes per network block, one wouldn’t expect to see increases over and over again. At the same time, the goal is to make it challenging to find the block’s header. If it is too easy, network blocks are found quicker than intended, which isn’t necessarily beneficial. Ensuring it doesn’t take much longer than 10 minutes to find a new block is equally challenging,
One factor to take into account is the overall network hashrate. A higher hashrate often results in blocks being found a bit quicker than average. To accommodate for this extra power, the mining difficulty needs to be increased. This equation works both ways too. An increase in difficulty requires extra hashpower to maintain the statistical chance of finding a new block.
Keeping all of the above in mind, it is interesting to see the mining difficulty chart evolve. Since early 2019, Bitcoin‘s difficulty has not decreased in a significant manner. Granted, there are two dips visible on the chart. At the end of the day, the mining difficulty keeps moving higher.
This raises the question as to how high it can go. Setting new records nearly every two-week period appears unsustainable. At the same time, the interest in mining Bitcoin has not decreased whatsoever. Despite numerous forks launching, and “Bitcoin killers” showing up as new blockchains, this trend will not be broken.
Overall Hashrate Remains Volatile
Throughout 2020, there have been several moments where a new hashrate all-time high is reached. Such a development warrants a Bitcoin mining difficulty increase. However, the hashrate is never stable.
This is primarily due to miners switching between profitable chains, as well as other external circumstances. Overall, the hashrate hasn’t dropped below 80 exohash in the past 6 months. It has risen as high as 161 exohash, however.
Interestingly enough, these fluctuations are not impacting the difficulty all that much. There are no “troublesome” differences in terms of hashrate in the past few two-week periods. As such, the difficulty keeps going up, whereas the rate keeps fluctuating a bit.
As long as it remains between 115 exohash and 160 exohash, the difficulty is likely to keep rising. At some point, there will be a small setback, as the hashrate isn’t sufficient to keep mining at that specific difficulty. If and when that will happen, is difficult to predict.