Bitcoin Mining Difficulty And Hashrate Hit Record-High as Competition Intensifies

Bitcoin mining difficulty has continued to increase over the past few months and has recently hit a new all-time high (ATH) amid growing competition among miners.

Mining Difficulty on The Rise

According to a report from the blockchain analytics platform, CryptoQuant, bitcoin’s mining difficulty has crossed 95.67 trillion. This key metric measures how hard it is to mine a new block on the Bitcoin network and it automatically adjusts every 2,016 blocks, which is approximately every two weeks.

The surge in bitcoin mining difficulty coincides with a spike in the hash rate, which has reached a record peak of over 722 exahashes per second (EH/s). The hash rate measures the computational power required to mine and validate transactions on a proof-of-work (PoW) blockchain, like the Bitcoin network.

Rising mining difficulty and hashrate often indicate growing competition among bitcoin miners, highlighting strong network participation and security.

Impact on Miners

The CryptoQuant report pointed out that the rising difficulty mounts further pressure on the mining industry since it becomes more difficult to generate profits. As the mining difficulty increases, bitcoin miners typically require greater computational power to process transactions, which increases operational costs for miners.

“With Bitcoin’s value on the rise, mining competition has intensified, posing challenges for the industry. Without sufficient transaction fees to support these costs, the burden on miners could grow significantly, potentially impacting the sustainability of the mining ecosystem,” the report stated.

With profit margins rapidly shrinking, several bitcoin mining firms are adjusting their bitcoin strategy. Earlier in September, Canadian mining company, Cathedra Bitcoin, revealed that it would channel its focus into accumulating more bitcoin from the open market.

While some companies have left the mining industry, others are acquiring their competitors to boost their mining capabilities by pooling resources, technology, and expertise. Last month, BitFuFu acquired a majority stake in a rival bitcoin mining firm in Ethiopia.

Meanwhile, bitcoin’s price has been affected by market-wide volatility as investors de-risk ahead of the U.S. elections tomorrow. The digital asset has hovered around $68,000 and is trading at $67,890 at press time.