On February 24th, 2023, Bitcoin achieved an unprecedented milestone when its mining difficulty reached an all-time high (ATH) of 43.05 trillion hashes at block height #778,176. This marks the first time the network has surpassed the 40 trillion mark. The difficulty of the network rose by 9.95%, representing the second-largest increase of the year, while Bitcoin experienced a combined 24.89% increase over the past 60 days.

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Prior to the difficulty change on the 24th of February, the average block time was approximately 9 minutes and 11 seconds. Currently, however, block times are ranging between 12 and 14 minutes, indicating that the recent change in difficulty has caused a slowdown in mining. As of Saturday, February 25th, 2023, the global hashrate of the network is fluctuating between 294.91 EH/s and 238.44 EH/s.

How Bitcoin mining difficulty is determined?

Bitcoin mining difficulty is determined by the protocol itself and is adjusted approximately every two weeks (2016 blocks) to maintain a target block time of 10 minutes. The difficulty adjustment is based on the total computing power, or hashrate, of the Bitcoin network, which is estimated by the number of hashes per second performed by all the mining devices on the network.

The mining difficulty is adjusted using a formula that takes into account the previous 2016 blocks mined on the network. If the blocks are being mined faster than the target time of 10 minutes, the difficulty will increase, making it harder for miners to find a solution to the cryptographic puzzle required to add a new block to the blockchain. Conversely, if the blocks are being mined slower than the target time of 10 minutes, the difficulty will decrease, making it easier for miners to find a solution and add new blocks to the blockchain.

The aim of adjusting the difficulty is to maintain a consistent block time of 10 minutes, regardless of changes in the network hashrate. This ensures that the supply of newly minted Bitcoins is kept steady over time and prevents the blockchain from becoming too congested or too sparse. Overall, the difficulty adjustment is a critical mechanism for ensuring the security and stability of the Bitcoin network.

How will that affect miners?

An increase in Bitcoin mining difficulty generally makes it harder for miners to solve the cryptographic puzzles required to add new blocks to the blockchain and earn rewards in the form of newly minted Bitcoins. This means that miners must use more computing power and electricity to compete for block rewards. As a result, an increase in mining difficulty can lead to decreased profitability for miners, as they must spend more resources to earn the same amount of Bitcoin.

To maintain profitability in the face of increased difficulty, miners may need to upgrade their mining hardware or join mining pools to share resources and reduce costs. Alternatively, some miners may choose to exit the market entirely, which could reduce competition and potentially lead to a decrease in difficulty over time. Overall, the impact of increased mining difficulty on miners depends on a variety of factors, including the price of Bitcoin, mining hardware efficiency, electricity costs, and market competition.

What other cryptocurrencies have similar mining difficulties?

The mining difficulty of different cryptocurrencies varies depending on the mining algorithm used by the particular cryptocurrency. Some cryptocurrencies that have similar mining difficulties to Bitcoin include:

1. Bitcoin Cash (BCH): Bitcoin Cash is a hard fork of Bitcoin that uses the same SHA-256 mining algorithm. As a result, its mining difficulty is quite similar to that of Bitcoin.
2. Litecoin (LTC): Litecoin is a cryptocurrency that uses the Scrypt mining algorithm, which is less complex than SHA-256 but still requires significant computing power. Its mining difficulty is also adjusted periodically to maintain a target block time of 2.5 minutes.
3. Bitcoin SV (BSV): Bitcoin SV is another hard fork of Bitcoin that also uses the SHA-256 mining algorithm. Its mining difficulty is therefore also similar to that of Bitcoin and Bitcoin Cash.
4. Bitcoin Gold (BTG): Bitcoin Gold is a hard fork of Bitcoin that uses the Equihash mining algorithm, which is designed to be ASIC-resistant. Its mining difficulty is therefore also similar to that of other Equihash-based cryptocurrencies like Zcash.
5. Dash (DASH): Dash is a cryptocurrency that uses the X11 mining algorithm, which is a chained algorithm that combines 11 different hashing functions. Its mining difficulty is adjusted periodically to maintain a target block time of 2.5 minutes.

It's worth noting that even if two cryptocurrencies use the same mining algorithm, their mining difficulties may not be exactly the same due to differences in their block reward systems, hashing power, and other factors.