Competition among Bitcoin miners intensifies as the difficulty of mining increases to an all-time high
While the price of Bitcoin (BTC), the biggest cryptocurrency by market capitalization, is marginally down, competition among those mining it has been increasing since the start of the year and has now hit a new all-time high.
According to statistics published by the crypto market analytics portal CryptoRank, the Bitcoin mining difficulty was 27.53 trillion hashes on March 18, up 13.6 percent from 13.6 trillion hashes at the year’s start.
The more miners who join, the more complex, time-consuming, and energy-intensive it gets to verify transactions (i.e. determining the correct hash for each block). Cryptocurrencies employ this difficulty to maintain a constant average time between blocks as the network’s hash power varies.
Meanwhile, Bitcoin’s hash rate (computational power of the network) has been gradually growing as well. It was 217.52 million TH/s (terahashes per second) at press time, up 4.81 percent from 207.53 million TH/s on January 1, 2022, according to Ycharts statistics.
Combining these two measures sheds light on the rising popularity of Bitcoin mining and the resulting increase in network security, since a big number of miners validating transactions suggests a high degree of security for a blockchain.
The dramatic increase in the number of people mining Bitcoin could be explained by the currency’s increasing sustainability, combined with the current state of geopolitical instability and the widespread belief that cryptocurrencies could act as a safe haven against the financial consequences of such instability.
Attempts to offset the energy expenses associated with Bitcoin mining
As mining becomes more complicated, the expenses of operating such an enterprise increase proportionately. To balance costs and minimise environmental effect, some miners are experimenting with novel approaches. One of them is an Arizona crypto enthusiast who has constructed a 6kW solar-powered Bitcoin mining setup.
Despite the increasing popularity of mining, the price of Bitcoin has fallen 13.6 percent year over year, from $46,730 on January 1, 2022, to $40,360 at press time.
However, according to CoinMarketCap statistics, the current price of BTC is still 3.62 percent higher than it was seven days ago, when the currency traded at $38.950.