Bitcoin difficulty continues to break records in 2023, posing significant challenges for digital miners. With every automatic adjustment that runs on the blockchain, the complexity of processing blocks of transactions continues to reach new heights.
In less than a week, the next adjustment is expected to occur, which will take the difficulty to a staggering 60T. This constant increase in difficulty is closely related to the growth in mining machine connections, which generates greater competition for blocks and keeps the average block creation time at approximately 10 minutes.
Automatic adjustments that occur every 2,016 blocks, equivalent to about two weeks, are crucial to the Bitcoin network. These settings ensure network stability and security by preventing blocks from being mined too quickly. However, the reason behind the continued increase in difficulty raises questions.
The economic context of Bitcoin in 2023 is marked by a bear market and inflation in the United States. These conditions negatively affect the income of digital miners, especially due to the constant increase in operating costs, mainly in energy.
Despite these challenges, mining companies continue to increase their equipment connections at an astonishing rate. This is unusual in a bear market, as it would normally be for mining to become unprofitable, and miners to go into deficit, resulting in mass disconnections.
The answer to this paradox is found in the “halving” event. This automatic network event happens every four years and consists of halving the rewards miners receive for validating transactions and securing the network.
Consequently, mining companies have no choice but to increase their hash power to compensate for the reduction in their already diminished revenues. The next halving is scheduled in less than 6 months, which has generated a race to increase hash capacity.
Difficulty increase in Bitcoin in the coming days
This urgent increase in hashing capacity has caused a steady growth in Bitcoin difficulty. In 2021, after overcoming the effect of the ban in China, the network saw the difficulty increase from 20T to over 400 EH/s.
The blockchain difficulty started 2023 at 24.37T and underwent 47 adjustments, of which only 23 decreased the difficulty. As a result, Bitcoin difficulty stands at 57.32T at the current time.
The difficulty is projected to reach 60T in the next complexity adjustment, which is expected in less than 5 days. This would represent a growth of 5.48% from the current point.