Mining bitcoin has just gotten harder. At publishing time, the mining difficulty of bitcoin hit a new all-time high.
On Sunday, the bitcoin mining difficulty had stood at around 37.59 million, but it recorded a rise of 4.68%, which saw it reach 39.35 trillion.
The computational power needed for mining a single BTC token is referred to as its mining difficulty. There is an update in the difficulty level in almost two weeks.
It becomes more difficult to mine bitcoin when there is an influx of miners in the network and their departure makes it easier.
The past year has seen mining difficulty climb steadily, even though it did decrease temporarily, as seen in the month of December.
The mining difficulty was 26.24 EH/s on January 30th, 2022, but it has recorded an almost 50% increase, as it climbed to 39.35 EH/s.
Meanwhile, the hash rate of Bitcoin, which determines the amount of computational power currently dedicated to mining has reached 305.81 EH/s.
This number still sits below the all-time high that the Bitcoin hash rate had reached at 348.7 EH/s on January 6th, 2023.
The hash rate
The existing hash rate shows that BTC miners are making around 305 quintillion attempts to break the code every second in order to solve the computational equations required for minting the proof-of-work (PoW) crypto.
The BTC hash rate had stood at 182.37 EH/s at the same time in the previous year, which means it has recorded an increase of 67%.
Even though both the Bitcoin hash rate and its mining difficulty climbed throughout 2022, the price of the pioneer crypto was not able to keep up.
According to data from CoinGecko, on January 30th, 2022, Bitcoin’s price had stood at $38,232, but it recorded a drop of 39.3%, as it was trading at $23,211 at publishing time.
Bitcoin miners facing difficulty
The rise in mining difficulty is certainly not good news for those who are part of the mining industry because it means that they would have greater hurdles to overcome.
Miners would require more advanced equipment, more power, and also more computers for minting the same amount of Bitcoin.
Moreover, if the price of Bitcoin does not rise with the mining difficulty, then it would make Bitcoin mining less profitable.
In recent months, there has already been plenty of news regarding the bankruptcy of companies and debt restructuring.
One of the biggest publicly traded mining companies in the US, Core Scientific filed for bankruptcy in December 2022.
Greenidge Generation is another major mining company that has publicly announced that there is substantial doubt about the company’s continued viability.
However, it should be noted that it is not just the increasing mining difficulty and low price of Bitcoin that is putting these companies under pressure.
There has also been a 16% increase in the prices of industrial energy between 2021 and 2022, which has resulted in problems for crypto mining companies that are running energy-intensive crypto mining machines.