- The last Bitcoin mining difficulty adjustment happened at the block height of 790,272
- A quick look at Bitcoin’s hash rate confirms that it has registered an increase over the past three days.
Mining problems are an important aspect of the Bitcoin blockchain. As such, any significant changes made in regards to difficulty could be worth looking into. Bitcoin just went through its latest difficulty level, so let’s dive in.
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The last Bitcoin mining difficulty adjustment occurred at the block height of 790,272 and resulted in a 3.22% increase in mining difficulty. This is important because such changes will affect not only mining profitability, but also the hash rate of the network.
Bitcoin ushered in a mining difficulty adjustment at block height 790,272, and mining difficulty increased by 3.22% to 49.55 T, breaking an all-time high. The current average hash rate is 354.55 EH/s. The recent popularity of Ordinals BRC20 has led to more mining…
— Wu Blockchain (@WuBlockchain) May 18, 2023
A higher difficulty means that miners need more computing power to stay profitable.
It can have a negative impact on the profit level. However, that may not necessarily be the case as miner earnings have increased over the past three days.
This has more to do with the fact that the overall hash rate of the market has not been affected, or compensated for the higher difficulty.
Source: Glassnode
Will the higher difficulty cause a drop in hash rate?
A quick look at Bitcoin’s hash rate confirms that it has registered an increase over the past three days. However, we have noticed that there have been fluctuations in recent days and the expectation is that the same trend will continue. T
this is because the difficulty has increased and is currently at its ATH. In other words, the higher mining difficulty will eventually put more pressure on miners and thus potentially negatively affect the hash rate.
📈 #Bitcoin $BTC Mining difficulty just reached an ATH of 212,814,354,678,563,007,889,408
Previous ATH of 209,218,190,478,118,995,623,936 was observed on May 4, 2023
View statistics:https://t.co/uH8dpKhxJ7 pic.twitter.com/XXLh3xL2SS
— glassnode alerts (@glassnodealerts) May 18, 2023
While miners’ earnings were growing, on-chain data revealed that miners have been averse to hodling in recent days. Miner reserves have also taken a dive. This means that these critical Bitcoin participants are still not confident enough to hang in the current state of the crypto market.
Source: CryptoQuant
The lack of confidence in Bitcoin reserves mirrors Bitcoin price movements. Miners are not willing to hodl if they are unsure of the short term potential.
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There are other factors that can come into play when mining Bitcoin. For example, the recent increase in Bitcoin ordinal inscriptions may still contribute to higher revenues for miners.
Nevertheless, BTC price action is still moving in a relatively sideways pattern, underscoring low demand and low selling pressure.