October 11, 2022
Bitcoin miners are now facing the headwinds of increased competition as the latest difficulty adjustment took effect on Monday.
According to data from BTC.com, mining difficulty surged 13.55% on Oct. 10 to an all-time high of 35.61 terahashes per second. Monday’s difficulty adjustment was the largest increase since May 13, 2021.
The sharp increase in mining difficulty was largely expected by industry watchers given the drastic rise in Bicoin’s hash rate over the recent weeks.
Unchained reported earlier that Bitcoin’s hash rate rose to an all-time high of 258.38 terahashes per second on October 8. This metric proves a large number of miners have been actively mining Bitcoin of late.
As Bitcoin’s creator Satoshi Nakamoto outlined in the Bitcoin whitepaper, the Proof-of-Work difficulty is determined by a moving average targeting a number of blocks per hour. If blocks are generated too fast due to increasing hardware speed, then the difficulty increases.
Existing players are likely upgrading to more powerful equipment for their mining operations, while the Merge has led to some Ethereum miners repurposing their mining rigs towards mining Bitcoin instead.
With Bitcoin now trading at $19,000, declining 11% over the last month, most small Bitcoin miners are feeling the heat.
“Only the most efficient miners will survive these low BTC price, high energy price, high difficulty conditions,” said on-chain analyst Will Clemente in a tweet.