Bitcoin miners are bracing themselves for a significant increase in the difficulty of the mining process this weekend.
According to estimations (1) provided by BTC.com, Bitrawr, Luxor, and Braiins, the increase might end up somewhere in the vicinity of 10%. There is a chance that the numbers will alter soon, but estimations point to a significant rise.
The term "difficulty" alludes to the challenging nature of the computing process that underpins mining. It is adjusted based on the average block time approximately every two weeks (or every 2,016 blocks).
After a snowstorm that prompted several miners to shut down their operations, either in response to price incentives or to requests from grid operators, dropped by 3.6% from the previous update.
Reasons for the Possible Increase in Difficulty of Hashrate
A significant portion of that hashrate has now been returned online, along with newly installed and more powerful computers.
According to Daniel Frumkin, head of research at Blockchains, "It's a combination of the institutional miners scaling a bit over that long period and some positive variance,"
He mentioned that businesses like Marathon and Hive Blockchain have consistently deployed highly effective machines such as S19 XPs and block-scale BuzzMiners.
"But because of the winter storm, we wouldn't have seen any of that in the previous epoch," he said. "That means we are now seeing about three weeks' worth of deployments rather than just one."
In addition to this, he stated that "there's probably a good bit of positive luck by pools in aggregate that's contributing to this large adjustment."
Based on the latest round and operating updates provided in December, Hive deployed 1,423 machines driven by Intel Blockscale, while Marathon stated that 12,000 S19 XPs would be powered in the following month.
The hashrate that Cipher Mining produces has been rapidly expanding, and it increased by 40 percent in the past month. Riot, which had installed 16,128 S19-series miners in December, reported that the storm had rendered around 2.5 EH/s inoperable.
Challenging economic conditions to affect Bitcoin Mining Rate
The hashrate has begun coming back online, according to Jason Les, the CEO of Riot.
Even though the previous week has been more bullish for the industry, with bitcoin currently rising above $20,000 & shares of public miners climbing, they are still facing challenging economic conditions.
"The energy costs that are linked with mining have not changed in any way that we can observe... Unless you have the most productive miner, there is not a significant amount of money to be made." Anthony Power, a certified public accounting and mines expert who compiles a monthly roundup, made this statement (2).
“If you don't have those, likely, you aren't producing enough money to support your expenses.”
Bitcoin Latest Price
As per latest data from tradingview.com, Bitcoin is trading at $ 20,721. It has risen 25% in last fortnight.