Bitcoin mining difficulty, the measurement of how challenging it is to solve the complex cryptographic puzzles used in the mining process, reached a milestone on February 16th, surpassing 80 trillion. The network’s hash rate, which measures the total computational power used by miners, reached 562.81 exahashes per second (EH/s), and the mining difficulty hit a new record of 81.73 trillion, according to BTC.com. Bitcoin mining difficulty has been steadily increasing since January 2023 and is expected to reach 100 trillion in the coming months.
In Bitcoin’s proof-of-work consensus mechanism, a higher difficulty means that miners require more computational power and energy to find the correct hash. Over the past year, Bitcoin’s difficulty level has more than doubled. At its automated readjustment on February 15th, Bitcoin mining difficulty was projected to increase by approximately 6%, potentially reaching new all-time highs above 80 trillion.
On February 16th, Bitcoin remained at $52,000 during the Wall Street open, as the latest macro data from the United States exceeded expectations. The price of Bitcoin showed little movement during the week’s final TradFi trading session.
Bitcoin’s mining rewards are set to be halved in April, an event known as the Bitcoin Halving. This reduction is baked into Bitcoin’s structure by its programmers approximately every four years to combat inflation. The last halving occurred in May 2020. During the upcoming halving, Bitcoin’s rewards will decrease from 6.25 BTC to 3.125 BTC. This change may lead to a lower hash rate as less efficient miners may struggle to cover their costs and shut down their mining rigs. A decrease in the hash rate is likely to cause a decline in Bitcoin mining difficulty as the network aims to maintain a steady block production every 10 minutes.
Analysts from Galaxy Digital estimate that up to 20% of Bitcoin’s current hash rate could go offline after the halving, leaving only the most efficient mining rigs operational.