Bitcoin Mining Difficulty Level Surges by 14 Percent on Tuesday
Bitcoin network experienced the biggest mining difficulty level in 29 months on Tuesday with over 14 percent rise from last mining difficulty level recorded in January 2018.
Difficulty level-a measure of how hard it is for miners to compete for block rewards on the blockchain.
The activities of the coin has been closely monitored after the third halving on May 11, 2020, which reduced the reward per block to 6.25 bitcoin from 12.5 bitcoin, forcing some miners to close operations due to reduction in block rewards and constantly rising cost of operations.
This reduction in operations led to a decline in the total hash rate and the difficulty level to 6 percent on May 20 and 9.29 percent on June 4, respectively.
Consequently, the decline saw a reduction in competition and bolstered the profit of those who continued operation.
However, some major miners in China brought in new and advanced equipment in May, this new technology increased the Bitcoin mining difficulty level.
The competitiveness has increased and the network sees the hash rate increasing as well, which will shorten the block interval and lead to a rise in difficulty level.
The CFO of the Luxor mining pool said “New hash rate coming onto the market will likely be driven by new-gen and high-efficiency machines.”
Kevin Zhang, director of blockchain strategies at New York-based bitcoin mining-power plant hybrid Greenidge Generation, offered a similar view, saying the firm’s strategy is to stay competitive by procuring and running the latest-generation equipment.
“Despite limited price action, we expect the hash rate to continue rising in the near term as more older generation miners go offline and newer generation ones come online,” he added.
