Bitcoin Mining Difficulty Reaches Record High Ahead of Halving Event

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Bitcoin mining difficulty has surged to a new all-time high in the final adjustment before the anticipated halving event scheduled for April 20th. The latest adjustment, which occurred late Wednesday at block height 838,656, saw the difficulty reach a record level of 86.39 trillion.

The figures are according to data from blockchain explorer Mempool. The increase indicates miners’ efforts to ramp up their hash rate as block subsidy rewards are set to decrease from 6.25 BTC to 3.125 BTC after the halving event.

Understanding Bitcoin Mining Difficulty and Hash Rate

Bitcoin mining difficulty rates the complexity involved in mining new blocks relative to the easiest it can ever be. This measure adjusts approximately every two weeks to maintain an average block generation time of 10 minutes, regardless of the changes in mining activity. This surge in difficulty implies that miners now require more computational power and energy to find the correct hash for the next block.

The hash rate on the other hand represents the total computational power dedicated to the Bitcoin network by miners. This has also reached a new seven-day moving average all-time high of 629.75 EH/s ahead of the difficulty adjustment. These spike in rates reflect the increase in mining activity and investment in mining infrastructure.

Will Halving Affect Hash Rate?

Bitcoin mining difficulty and hash rate have seen steady growth throughout the year with difficulty rising by 20% and total hash rate increasing by 24%. Although miner revenues have experienced a boost due to the surge in Bitcoin’s price, the impact of the upcoming halving remains uncertain. There are speculations of less efficient mining operations which could potentially affect overall network metrics post-halving.

Following the difficulty adjustment, Bitcoin’s hash price, representing the expected value of 1 TH/s of hashing power per day, fell to $0.11/TH/s. This will halve immediately after the halving event. This metric which provides insight into a miner’s profitability also computes the anticipated earnings from a specific quantity of hash rate. In February, an unprecedented high in hash rate sparked optimism among market watchers for Chainlink and InQubeta.

Implications of Bitcoin’s Halving Event

Bitcoin’s halving event occurs every 210,000 blocks or roughly every four years. The programmed event is set to reduce block subsidy inflation by 50%. In spite of the reduction in block rewards, miners will continue to earn transaction fee rewards for each block mined.

The halving events will persist until the total supply of Bitcoins reaches 21 million, expected around the year 2140, after which miners will rely solely on transaction fees. Historically, Bitcoin halving events have more often than not signaled the beginning of bullish cycles.

With Bitcoin currently trading above $70,000 and up 67% year-to-date, market participants await with keen anticipation the impact of the upcoming halving on Bitcoin’s price trajectory.

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