Mining difficulties. In the wake of Bitcoin’s hash rate reaching new heights, the adjustment for the difficulty or difficulty miners have to overcome to solve valid blocks increased by 13.55%.
Despite the pressure of falling prices in 2022, the difficulty adjustment has continued to rise steadily since the lowest level in August 2021. It reached a record high of 35.61 trillion on October 10, after a period in which six blocks were dissolved in quick succession.
For Mark Morton, CEO of Scilling Digital Mining – an Ireland-based Bitcoin miner – “the next difficulty adjustment assumes that miners still find enough profit to embed new machines and are likely to benefit from lower prices for the machines.”
Morton also mentioned that higher complexity and hash rate “have a very positive impact on the security of the bitcoin network. We are seeing a huge rise in network security even as the bitcoin price drops.”
Difficulty adjustment occurs approximately every 2 weeks or 2016 blocks. Given that blocks were solved on average just below the 10-minute goal, the difficulty adjustment increased. According to Braiins, a bitcoin mining tool company, the average time over the last 2016 blocks was just nine minutes, known as an epoch.
In the Bitcoin white paper, Satoshi Nakamoto explains that “if [blocks] are created very quickly, the difficulty increases.” Generally:
“To compensate for the increase in hardware speed and the change in interest in running nodes over time, the difficulty of proof-of-work is determined by a moving average targeting average blocks per hour.”
Morton told Cointelegraph that the lower price, along with the increasing difficulty, could challenge miners who mismanaged their finances during the 2021 bull market. Indeed, threats of miners capitulation loom during the 2022 bear market, while some miners have had to Sell some of their possessions. during summer.
“The miners who assumed we would have a market that would only grow and buy machines at high prices would certainly feel disadvantaged,” Morton explained. Some bitcoin miners are starting to look for ways to cut costs, such as using waste heat to keep work areas at a constant temperature.
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Referring to the increasingly creative ways in which miners are finding ways to channel unused energy sources and take advantage of miners’ waste heat, Morton concluded that “the competition among miners to find innovative and strategic energy sources bodes well for the future of the grid, as direct reliance on Bitcoin price is falling.”
In September, Cointelegraph produced a documentary on Bitcoin mining in collaboration with Digital Scilling Mining that explored the use of organic agricultural waste for BTC mining. The short film Turning Cowpat Into Digital Gold will be broadcast on Cointelegraph’s YouTube channel in 2022.