The upcoming adjustment in Bitcoin mining difficulty is poised to reach an all-time high, indicating a sustained increase in the volume of mining machines vying to uphold the network’s security.
This adjustment signifies a significant increase of over 2.7% in the difficulty individual miners will encounter when trying to successfully mine a Bitcoin block.
The rise in mining difficulty is a direct response to the current average block time, which, according to CoinWarz.com, stands at approximately 9.73 minutes. This time is around 0.27 minutes (or roughly 16.2 seconds) faster than the intended block time of 10 minutes set by the Bitcoin protocol.
Crypto on-chain data analytics firm Glassnode explains that the Bitcoin protocol “will adjust the difficulty up or down when the average observed block-intervals are shorter or longer (than 10 minutes), respectively”.
Based on data provided by Glassnode, the 14-day moving average of the mean daily hash rate reached a new all-time high on Monday, standing at approximately 366 exahashes per second (EH/s). This indicates a significant surge in mining activity and computational power dedicated to Bitcoin mining.
What Factors are Contributing to the Increase in Bitcoin Mining Difficulty?
The recent spike in Bitcoin network fees during this month has significantly enhanced Bitcoin mining profitability.
Miners now receive not only newly minted BTC tokens as rewards for mining each block but also a portion
of the network fees. This double incentive has contributed to the increased profitability for miners.
The surge in fees, although it has somewhat subsided in recent weeks, continues to persist at unusually high levels. The increased usage of this protocol has contributed to the congestion and subsequent higher fees on the Bitcoin network.
The Ordinals protocol has garnered recognition for introducing the innovative concept of directly inscribing data onto the Bitcoin base chain. Its introduction has brought about notable advancements in leveraging the capabilities of the Bitcoin network.
With the implementation of the Ordinals protocol, notable developments have occurred on the Bitcoin blockchain. Notably, the issuance of Non-Fungible Tokens (NFTs) and BRC-20 tokens can now take place directly on the Bitcoin blockchain.
This expansion has facilitated the emergence of smart-contract-powered decentralized applications,
leading to the proliferation of innovative projects and platforms within the Bitcoin ecosystem.