Mining bitcoin Now it demands more computing power than ever before, with a mining difficulty hitting a new high of 17.35 trillion, 9.89% more than the previous record released on July 1.
The new bitcoin mining difficulty (a metric describing how difficult it is to compete for cryptocurrency rewards on the bitcoin blockchain) is a reflection of the increase in computing power dedicated to bitcoin mining in recent weeks.
Automatically altered after every 2016 blocks processed, which occurs about every two weeks, bitcoin’s mining difficulty fluctuates in line with the level of competition on the net. If competition among miners is high over the two-week period, bitcoin mining will become more computationally complex for the next 2016 block cycle, based on network design.
The new record was reached two months after the third. bitcoin halves took place, which reduced the reward for successfully validating a new block from 12.5 to 6.25 bitcoin, or from about $ 115,000 to $ 57,500 at the current rate.
By halving the revenue generated by mining operations, the historic event was expected to eliminate smaller miners, who were deemed unable to bear the new cost of operation. However, the new record mining difficulty suggests that investment in high-end mining equipment has only increased since the halving event.
Bitcoin mining
Bitcoin is the world’s first cryptocurrency and the largest today by market cap, followed by Ethereum and XRP. The number of bitcoins currently in existence is 18 million, and the limit (whose role is to simulate scarcity) is expected to be reached sometime in the first half of the next century.
When the cryptocurrency was in its infancy, mining bitcoin was relatively easy, so that an individual with a powerful computer could successfully make a profit. In other words, the value of the cryptocurrency reward was greater than the cost of the electricity spent (and any other overhead).
Today, the difficulty of bitcoin mining has driven individual miners out of the market (despite the high value of a single coin) and the scene is dominated by mining unions, which see participants pool computing resources in exchange for a portion of the group’s cryptocurrency earnings.
These bitcoin mining consortia are known to take extensive steps to improve profit margins, including tailored agreements with energy providers that guarantee cheaper energy in exchange for a commitment for a predefined period.
While it’s almost impossible for an individual user to make bitcoin profits today, mining unions provide an alternative route for dedicated enthusiasts.
However, it is important to understand that due to variation in mining difficulty and fluctuation in bitcoin’s value, participating in a mining operation is a speculative pursuit and does not guarantee an income.
Via CoinDesk
