On-chain data shows that bitcoin difficulty has seen a third consecutive increase in the latest network adjustment. Here's what this means for btc.
bitcoin Difficulty Just Set a New All-Time High
According to data from bitcoin/difficulty-chart” target=”_blank” rel=”noopener nofollow”>CoinWarzbtc difficulty has seen a positive change during the latest network adjustment. The “difficulty” here is a metric that tracks how difficult it would be for bitcoin miners to mine on the network.
The value of this indicator is updated every two weeks without human participation; the code Satoshi wrote makes the adjustments automatically.
The last such adjustment occurred last day and resulted in difficulty moving up the chain. Below is a chart showing how the value of this metric has changed over the past few months.
<img data-recalc-dims="1" decoding="async" class="alignnone wp-image-337295 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/11/Bitcoin-Difficulty-Experiences-Third-Consecutive-Jump-Sets-New-Record.png" alt="bitcoin Mining Difficulty” width=”980″ height=”499″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/11/chart.png?w=1089 1089w, https://bitcoinist.com/wp-content/uploads/2024/11/chart.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/11/chart.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/11/chart.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/11/chart.png?w=750 750w” sizes=”(max-width: 980px) 100vw, 980px”/>
The value of the metric appears to have seen a sharp surge recently | Source: bitcoin/difficulty-chart" target="_blank" rel="noopener nofollow">CoinWarz
The chart shows that bitcoin difficulty also saw jumps during the previous two adjustments, but this latest increase of over 6% is the largest of the three.
As for why the chain has increased its difficulty recently, the reason lies in the trend that Hashrate has been observing. The “Hashrate” is a measure of the total amount of computing power that miners as a whole have connected to the bitcoin blockchain.
Here is a graph of Blockchain.com showing the trend in the 7-day average value of this btc indicator over the past year:
<img data-recalc-dims="1" loading="lazy" decoding="async" class="alignnone wp-image-337298 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/11/1730902082_366_Bitcoin-Difficulty-Experiences-Third-Consecutive-Jump-Sets-New-Record.png" alt="bitcoin hash rate” width=”980″ height=”416″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=1386 1386w, https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/11/chart_72061a.png?w=1140 1140w” sizes=”(max-width: 980px) 100vw, 980px”/>
Looks like the value of the indicator has been following an uptrend in recent weeks | Source: Blockchain.com
The chart shows that the 7-day average bitcoin Hashrate has been rising for a while now and reaching new all-time highs (ATH). The uptrend has been particularly pronounced over the past few weeks, suggesting that miners have become more aggressive with their expansion.
Now, what is the relevance of this to the difficulty? Well, one of the main characteristics of the network is that its blocking time remains constant at around 10 minutes.
Every time miners add energy, they become faster in their task of mining and produce blocks at a faster rate than this standard. To counteract this increase in speed, the network makes it harder for miners to perform their tasks, bringing them back to 10 minutes per block.
The cryptocurrency's Hashrate has seen an explosion recently, so the chain has only responded as designed, appropriately increasing the Difficulty to a new record high.
But why did the creator of btc add this limitation? The block subsidy, which serves as the only means to produce more btc, may be limited by restricting how quickly miners can traverse blocks and earn these rewards.
The supply of the asset grows continuously, but at least the existence of the difficulty means that its inflation only occurs at a predictable rate.
btc Price
bitcoin fell below $67,000 yesterday, but the asset quickly recovered as its price recovered to $69,700.
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The price of the coin seems to have surged over the last 24 hours | Source: BTCUSDT on TradingView
Dall-E Featured Image, Blockchain.com, TradingView.com Chart
