When mining bitcoin, one of the key factors in determining success is the difficulty.
As a Proof-of-Work-based cryptocurrency, crypto miners contribute hashpower in a race to solve complex puzzles required to secure each bitcoin block.
So, here's all you need to know about bitcoin mining.
What is Bitcoin Mining Difficulty?
Bitcoin mining difficulty is an indicator of how hard it will be to mine a BTC block.
Higher difficulty means that the network is theoretically more secure from harm, such as 51% attacks that recently hit Bitcoin SV.
For individual miners (or pools), a higher difficulty means more hashpower is needed to be in with a chance of gaining block rewards.
Bitcoin's difficulty last changed to 14.50 T on July 31, which marked a 6% increase from the previous difficulty.
How is Difficulty Calculated?
At the most fundamental level, bitcoin difficulty varies depending on the computational power in the mining network.
Difficulty functions to keep the block times fairly consistent, and so with a higher overall network hashrate, this difficulty will increase.
This difficulty shift is among the main criticisms of bitcoin's environmental impact. As the difficulty increases, more electricity is used in an attempt to solve the complex puzzles required for each block.
The mining difficulty changes every 2016 blocks - or every two weeks.
The formula for bitcoin difficulty is as follows:
difficulty = difficulty_1_target / current_target
Will Bitcoin Difficulty Increase or Decrease?
Bitcoin's difficulty has seen a sizeable decrease in recent months, as China's crackdown on bitcoin led to a lower total hashrate. In mid-July 2021, the difficulty was at 13.673 T - the lowest difficulty since January 2020.
Looking ahead to the future, BTC.com predicts the difficulty will rise 3.5% TO 15.01 T, as the total hash rate spiking to 110 million from its mid-July low of 84.79 million.