Pre-Halving Adjustments Increase Mining Challenges
The Bitcoin mining difficulty has hit a new all-time high of 86.4 trillion, marking a significant increase ahead of the upcoming halving event. This adjustment, which took place on April 10, represents a 3.4% rise from the previous level of 83 trillion set on March 28. With the halving expected to occur in eight days, this adjustment is likely the last before the event that will reduce miner rewards by half.
Implications of the Halving Event
The Bitcoin halving, a major event in the cryptocurrency industry, is anticipated to occur on April 19. This event, which happens approximately every four years, will see the block reward for miners reduced from 6.25 BTC to 3.125 BTC. The halving aims to control inflation and maintain scarcity by reducing the rate at which new bitcoins are created.
Mining Difficulty and Hash Rate Dynamics
Bitcoin mining difficulty is a measure of how challenging it is to mine a new block or solve the mathematical puzzles required under Bitcoin's proof-of-work (PoW) consensus mechanism. The difficulty adjusts every 2,016 blocks, or roughly every two weeks, to maintain a target block time of 10 minutes. The hash rate, which measures the computational power of miners, has also seen a significant increase, rising from 619 exahashes per second (EH/s) on March 28 to 696 EH/s on April 10.
Predictions for Post-Halving Hash Rate
While the hash rate reached an all-time high of 727.9 EH/s on March 24, some analysts predict a potential drop following the halving. Galaxy's mining analysts suggest that up to 20% of the current hash rate could go offline as miners turn off their rigs due to reduced efficiency post-halving. They note that more than 70% of the Bitcoin hash rate is produced by eight specific ASIC miner models as of the end of 2023.
