Bitcoin mining has continued to evolve as the cryptocurrency industry has grown from one level to the next. Having begun as a simple task which could be completed by an average computer, mining has now become much more complex, requiring sophisticated equipment and a lot of energy. Companies have sprung up across the world developing Bitcoin mining equipment that gives the miners an edge over their rivals. The change in the mining patterns has been as a result of the constant shifts in the Bitcoin mining difficulty.
Bitcoin mining difficulty is a value that indicates how hard it will be to find a hash that’s lower than the target, which the system defines. It shows how hard it is to compete for the mining rewards on the Bitcoin blockchain with the other miners.
The Bitcoin mining difficulty is automatically adjusted every two weeks to account for any changes in the hash power available from the miners. So, how competitive is Bitcoin mining today?
In the 2018 crypto winter, many miners went out of business. The prices were low and the revenues gained couldn’t account for the heavy energy costs. The number of miners dropped drastically, hitting its lowest in December. The mining difficulty went down in response as well. However, cryptos have bounced back since then, leading many of the miners to resume mining. The mining difficulty has also increased quite significantly to reflect these changes.
This year, Bitcoin mining difficulty has repeatedly smashed previous records to set new all-time high records. This has been as a result of the steady rise in the network’s computing power. In the month of August, the hash rate hit a record-setting 82.5 TH/s (terahashes per second). For reference, in 2018 before the crypto winter took its toll on the miners, the record hash rate recorded had been 56 TH/s. It later dropped to 32 TH/s in December last year before embarking on a consistent rise since then.
With the assumption that most of the mining is being done by some top-of-the-range equipment, it’s estimated that over 100,000 miners have begun operations in the past month. This is an indication that Bitcoin mining is now the most competitive it has ever been.
Mining equipment manufacturers have strived to keep up with the increased demand for the equipment. As these manufacturers develop faster and more efficient mining equipment, the mining hash power is expected to greatly increase, further pushing the Bitcoin mining difficulty upwards.