Since the start of 2022, the price of Bitcoin (BTC) has fallen by more than 40% from its (ATH) high of $69,044.77 on November 10, 2021.
This price volatility has not affected the network’s ability to make it more difficult for miners to mine Bitcoin. As the competition between the two miners continues, Bitcoin’s problems have reached a new level for the second time in two months. The hash rate has also steadily increased by 45% in 6 months after low targets in July last year.
The complexity of the Bitcoin network is determined by its overall processing power, which correlates with the complexity of confirming transactions and extracting BTC.
In order to validate the block and get a reward, the miners face more resistance as the difficulty increases. The miners, unable to catch up, drop out of the race. This dilemma among miners securing the network and making enough profit is likely to continue to emerge as it determines the viability of their current operations.
Measurements of the network’s hash rate also showed that it reached new ATHs, following the same trend as Bitcoin’s difficulty measurements. The Bitcoin network appears to be at the top when it comes to security, the more hashing power the network uses, the more work is distributed for each transaction that occurs on the chain.
Since there is no standard convention for counting these accounts, various hash rates have been reported in recent weeks. Despite the different methods used, there is a general consensus that hash rate and mining difficulty have increased since last fall in July 2021.
The difference between Bitcoin hash and difficulty level
Bitcoin mining is the process of adding new transactions to the Bitcoin blockchain. Using Proof of Work (PoW), miners compete to solve mathematical problems that confirm transactions.
Bitcoin hash rate refers to the estimated number of hashes generated by miners trying to solve the current bitcoin block or a particular block. This is how new blockchain transactions are added to the system.
Bitcoin hash rate is measured in hashes per second (H/s). Miners need a high hash rate to mine successfully.
Both the difficulty level and the hash are very large numbers expressed in units, so for the process to be profitable for miners, the computation simply requires that the hash be less than the difficulty level.
Bitcoin difficulty is calculated based on how miners are required to produce a hash lower than the target hash. It grows or decreases exponentially, depending on the number of miners competing on the network.
The difficulty level of each bitcoin block in 2016 is adjusted – or roughly two weeks – to maintain a constant block time, which means how long it takes to find each new block while mining.
Miners must find blocks every 10 minutes. Thus, if miners solve blocks and find more bitcoins every 10 minutes, the difficulty increases on average. If miners find bitcoins less than every 10 minutes on average, the difficulty drops.
The more miners connected to the network, the higher the hash rate, which means that the correct hash is more likely to be discovered quickly. However, since the blockchain is generally designed to add blocks (and issue new coins) at a fixed and predictable rate, the difficulty is programmed to automatically adapt to a certain number of blocks in order to maintain a constant rate.
Bitcoin difficulties with numbers
Bitcoin difficulty has steadily increased with each network difficulty adjustment since it reached NOTE, regardless of the measurement tools used.
Miners have to work harder to solve the equations that process blockchain transactions. They are the most fundamental components of the Bitcoin network because they ensure that mining runs smoothly regardless of factors such as sentiment, prices or black swan events.
According to CoinWarz, both the hash rate and mining difficulty continue to rise steadily from their lowest point last July, when the hash rate dropped to 69.11 EH/s (1 e-hash = 1 quintillion hash). While I was mining, the difficulty level was 13.6 trillion hash.
On-chain analysis tools showed that mining difficulties reached ATH 27.97 trillion hashes on February 18, with a hash rate of 186.77 (EH/s).
Previously, the network’s new ATH was reached on January 21 at 26.64 trillion hashes at a hash rate of 173.57 (EH/s).
Although hash rate and complexity are two different factors, they show the degree of correlation.
The network hash rate has also recently hit new ATHs. On February 14, the Bitcoin hash rate reached 224.17 (EH/s).