On-chain statistics reveal that the Bitcoin Difficulty is poised to rise by approximately 4% in the forthcoming adjustment, driven by the surge in the Hashrate.
Bitcoin Mining Difficulty Will Rise on Sunday
Data from CoinWarz indicates that the BTC network is on track to elevate the Difficulty in the upcoming adjustment. The term “Difficulty” refers to a parameter integrated within the Bitcoin blockchain that regulates how challenging it is for miners to successfully mine a block. This mechanism is in place to manage the duration taken by miners to discover the subsequent block.
Each time miners successfully mine a block, they receive a reward linked to it, termed the block subsidy. This reward represents the sole means of generating additional units of the asset; hence, by overseeing the rate at which miners can acquire it, the inflation of the cryptocurrency can be moderated.
As is widely understood, miners within the Bitcoin network necessitate computational power to carry out their mining tasks. The aggregate computational power maintained by the validators is referred to as the “Hashrate.”
When miners enhance the Hashrate, they accelerate their operations and produce blocks at a quicker pace. As mentioned earlier, the network aims to prevent this from occurring; therefore, it adjusts the Difficulty sufficiently to ensure miners revert to the standard network pace, which is one block every 10 minutes.
Conversely, if miners lessen the Hashrate, the blockchain compensates by reducing the Difficulty. All these modifications concerning the metric take place approximately every two weeks during automatic network tweaks.
Below is the pertinent data regarding the state of the blockchain as it approaches the next such adjustment, scheduled for this Sunday.
It appears the average block time has been 9.60 mins during this period | Source: CoinWarz
As evident, the average block time since the last Difficulty adjustment has been 9.60 mins, which is significantly less than the 10 mins that the network targets. Consequently, in order to decelerate the validators, the chain will elevate the Difficulty by over 4%.
The underlying cause for the reduced block time stems from the dramatic rise in the Hashrate, as depicted in the chart illustrating the 7-day average value of the metric from Blockchain.com.
The value of the metric appears to have surged recently | Source: Blockchain.com
From the illustration, it’s clear that the 7-day average Bitcoin Hashrate achieved a new all-time high (ATH) just a few days ago. The indicator has since experienced a minor pullback, yet its value remains relatively close to this peak. Should the Difficulty increase by 4% as anticipated, it would also mark a new ATH.
BTC Price
At the moment of writing, Bitcoin is trading around $97,000, a decrease of more than 6% over the past week.
The value of the coin appears to have remained stable over the past few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Blockchain.com, CoinWarz.com, chart from TradingView.com
