Bitcoin Hashrate, Mining Difficulty Hit New Highs and Inefficient Miners

Source: iStock/Denes Farkas

As Bitcoin (BTC) mining difficulty and hashrate hit new highs, less efficient miners, hurt by the virus outbreak, new-generation rigs, and falling BTC prices, may be out of business.

Bitcoin mining difficulty, a measure that shows how hard it is to compete for mining rewards, has hit yet another record. According to the major Bitcoin mining pool BTC.com, it climbed to 16.55 T today, never being outside the 15 T range before.

This was a rise of 6.88%. It follows a 0.38% drop in mining difficulty two weeks ago, which was the first drop this year. That said, it took BTC mining difficulty just half a year to climb from 10 T to 16 T, making validating new blocks harder.

Bitcoin Hashrate, Mining Difficulty Hit New Highs and Inefficient Miners 102
Source: BTC.com

BTC.com estimates that during the next difficulty adjustment, expected to happen in two weeks, it will climb 7% to 17.71 T.

On the other hand, the price of the world’s most popular crypto has been falling. It’s currently (10:10 UTC) standing at USD 7,935, having dropped 9% in 24 hours and 9% in a week. Since the last adjustment, on February 25, it has dropped 17%.

Meanwhile, corresponding with the rise in mining difficulty, the computational power of the Bitcoin network, known as hashrate, has also gone up. Since the last halving on February 25, the 7-day average hashrate increased by around 9%, to 121 TH/s on March 7, according to blockchain.com data.

The hashrate going up suggests that the network is more secure but at the same time it leads to higher mining difficulty, in order to bring block time closer to 10 minutes. There are three major development that may be contributing to this rise in hashrate, and therefore, the difficulty.

1. Coronavirus outbreak: back to proof of work

As discussed previously, the outbreak of coronavirus and the subsequent quarantine by the Chinese authorities have had a massive impact on businesses and workers, including mining equipment makers. Mining hardware giants Bitmain, Canaan, and MicroBT had issued notices of a…

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