Bitcoin Mining Difficulty Hits Record High Amid Rising Prices and Halving Anticipation
Summary:
Bitcoin's mining difficulty reached a record high of 83.95 trillion hashes on March 14, coinciding with its all-time-high price of $73,835. This increase in difficulty reflects the growing number of miners in the network. Meanwhile, miners' rewards also peaked at $78.89 million and Bitcoin's price continues its upward trend. Experts link this steady growth to the much-anticipated Bitcoin halving event set for mid-April, where the block reward for mining will be halved from 6.25 BTC to 3.125 BTC.
Bitcoin's mining difficulty scale broke a new record on March 14, soaring to an unprecedented 83.95 trillion hashes. Interestingly, this happened on the same day Bitcoin (BTC) hit a historic price peak of $73,835, a development spurred by heightened investor interest prior to the Bitcoin halving event in April. In essence, mining difficulty is an indicator of how strenuous it is to "mine" Bitcoin, which involves solving complex cryptographic puzzles that either spike or dip in difficulty based on the number of miners in the network.
Bitcoin's new difficulty peak of 83.95T hashes, a 5.8% increase from February's mark of 79.35T, was recorded on February 29. The adjustment was made at a pace of 613.94 exahashes per second (EH/s), noting a 1.96% climb from the last cycle's 602.14 EH/s, as per data from BTC.com. Remarkably, mining difficulty breached the 80T mark about a month prior, on February 15, before seeing a slight decrease on February 29. BTC.com's projections hint at a subtle increase to 84.17T for the upcoming difficulty check scheduled for March 27.
Amid all this, Bitcoin's consistent upward trajectory has proven beneficial for miners, whose rewards touched a new height of $78.89 million on March 11, breaking the last record of $74.4 million from October 2021. Bitcoin's price mirrored this uptrend, hitting $72,953 on March 12, but receding down to $69,655 shortly after. The Bitcoin price performance on March 14 showed a similar pattern, peaking at $73,835 before making a slight drop to $69,813. At the time of this report, Bitcoin has bounced back to $70K, as reflected by Coinbase data.
Crypto market analysts and commentators broadly believe that Bitcoin’s steady ascent during Q4 2023 up until now in Q1 2024 can be largely attributed to the hyped-up halving event due to take place in mid-April. During the halving, the block reward for mining BTC will be halved from 6.25 BTC to 3.125 BTC. Historical halving events include the first on November 28, 2014, where rewards reduced from 50 to 25 BTC, followed by July 9, 2016, when they were brought down from 25 to 12.5 BTC. The latest instance was on May 11, 2020, with block rewards dropping to 6.25.
In related news, a 30% crypto mining tax has been revived in President Biden's recent budget proposal.
Published At
3/14/2024 9:40:00 PM
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