The Bitcoin network has witnessed the difficulty level increase by 8.16% earlier today due to shortened block generation times.
The Bitcoin network is probably the largest among all cryptocurrencies. Based on the Proof of Work consensus algorithm, the amount of processing power involved in Bitcoin mining is huge, equivalent to a bunch of supercomputers. The total hashing power of Bitcoin network continues to grow as more specialized mining hardware keeps on getting added.
Every player in the mining community wants to have a bigger chunk of rewards for himself, which has increased the competitiveness. Logically, the use of much powerful hardware will make it easier to crack the cryptographic puzzle much faster to discover new blocks. But, the Bitcoin developers had seen it coming long ago. In order to prevent miners from exploiting the network with powerful machines and to ensure a constant supply of Bitcoin, difficulty level regulation is built into the system.
The difficulty levels of Bitcoin mining operation tend to adjust itself after every 2016 blocks. The difficulty adjustment will depend on the network’s performance, taking into account the availability of hashing power and average time taken to discover new blocks. If the block generation time is faster than 6 new blocks an hour, then the difficulty will increase, Similarly, if the block discovery time is higher than 10 minutes, owing to increased difficulty, it will be reduced to ensure a constant rate of generation.
The promising price trend exhibited by Bitcoin in the recent months has encouraged many players to start new mining operations and expand the capacity of existing ones. The increase in network’s hashing power is being reflected in the difficulty history. The latest change of 8.16% followed earlier changes of 10.68% and 1.76% on November 18th and December 2nd respectively.
The current difficulty level of Bitcoin network stands at 310,153,855,703 as against the total hash rate of 2,220,167,778 GH/s. If the recent developments in cryptocurrency mining sector is any indication, then the difficulty level will continue to climb. The increase in mining activity among Venezuelans and the upcoming data centers, including the massive one being built by Bitmain will play an important role in the changing difficulty levels.
Ref: Bitcoin Wisdom | Qntra | Image: MiningLifeOnline