The incremental increase, which automatically came into effect on July 31, signals that mining competition is intensifying as many exiled Chinese miners resume operations following China’s crackdown on crypto mining in June.
A continuous eight week drop in mining difficult rates across four intervals is largely unprecedented.
This upturn is mathematically tied to the slowly climbing BTC SHA256 hash rate (effectively a measure of how many miners are actively mining), which has now recovered to 114 EH/s – levels not seen since November.
Understanding difficulty rate
The difficulty rate automatically adjusts on a fortnightly basis to maintain consistent block times of around 10 minutes per block; this ensures blocks are added at regular intervals into Bitcoin’s blockchain.
The difficulty rate also informs miners on their decisions to sell, so needless to say, all eyes are on the adjustment later this week.
With the January 2021 bull run prompting an all-time high in the mining difficulty rate (a 21.5% increase), it is worth considering the hash rate has remained above 100 EH/s for the best part of the past year, so the move to 114 EH/s is a healthy recovery.
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Disclaimer: The views and opinions are expressed by the author
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.