According to CloverPool data, Bitcoin mining difficulty adjustment rose on January 12. It reached a new all-time high of 110.45 trillion at block height 878,976. Crypto mining difficulty does not have a standard unit. Instead, it is a number measuring how complex it is to generate a new block on the blockchain. In the case of Bitcoin, the latest data indicates that mining on the BTC network is about 110.45 trillion times more complex than when Satoshi created the genesis block on January 3, 2009.
What It Means for the Industry
Per the data, Bitcoin mining difficulty saw a positive adjustment for the eighth consecutive cycle. This mimicked the November 2021 bull market trend. The difficulty adjusts roughly every two weeks to ensure that mining one block takes 10 minutes. This is regardless of the number of active miners there are.
The record-high difficulty of Bitcoin mining indicates an increased number of miners on the blockchain. This strengthens the network against potential attacks and enhances its resilience and trustworthiness as crypto marches to the mainstream arena. However, the development also signals underlying challenges, including increased mining competition and high operation costs, as miners source more computational power to compete for block rewards.
At the same time, small miners are likely to take a profit hit as the mining landscape favors institutions with more efficient hardware. On top of these new challenges, Bitcoin miners saw a sharp decline in revenue following its fourth halving event on April 20, 2024. The event lowered block subsidy rewards from 6.25 BTC to 3.125 BTC. The revenue has since dropped from a seven day moving average of $72.4 million to a range of $25 to $35 million.
This forced publicly traded companies to pivot to emerging sectors like AI and high-performance computing to boost profits. Players like MARA Holdings resorted to issuing convertible notes to buy Bitcoin and lending out their original crypto holdings to earn single-digit yields.
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