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Bitcoin mining difficulty spikes 9.26% to hit a new record high

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(Kitco News) - Bitcoin’s (BTC) mining difficulty climbed to a new record high over the final days of August despite the struggle its price has had to gain any meaningful momentum over the past six months. 

Data from on-chain monitoring resource BTC.com shows that the fundamental strength of the Bitcoin network has never been as high as it is now following a 9.26% automatic adjustment in difficulty on Aug. 31, its largest increase since January. 

The network’s total hashrate has likewise been on the rise, currently coming in at an average of 223 exahashes per second (EH/s) and now taking aim at its all-time high of 251 EH/s which was achieved in May, just before the Terra LUNA collapse.

 

Bitcoin network fundamentals overview. Source: BTC.com

A climbing difficulty and hash rate signal that competition among miners is as healthy as ever, while their conviction in the long-term profitability of participating in the mining process remains high. 

Mining difficulty refers to the level of complexity involved in the mathematical process behind mining, which requires miners to solve complex equations in an effort to produce a valid block that can be added to the blockchain. 

As the network’s hash rate increases, the mining difficulty adjusts higher to ensure that the block time stays relatively consistent around 10 minutes. 


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The Bitcoin hash rate has increased by more than 12% since Aug. 18, the date of the last update, which coincides with this most recent increase in difficulty as the network adjusted to the increasing hash rate. The difficulty rate adjusts every 2,016 blocks (roughly every two weeks) in sync with the network's hash rate.

This rebound in both difficulty and hash rate comes after a significant decline earlier in the summer as issues like extreme heat in Texas resulted in several large mines closing in an effort to help conserve energy. 

It’s possible that this is the start of an emerging trend, according to macro analyst Jason Deane, who commented on the “big jump” in difficulty in a Twitter post

“Personally, I think as more hashrate comes from the US, we'll see a new annual seasonal trend like we used to see in China. ie hot months lower hashrate/helping to stabilize grid, cool months higher hashrate,” Deane said. 
 

 

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