Despite increasing regulatory pressures, the cryptocurrency industry continues to grow and attract new entrants who recognize the opportunity to earn income through cryptocurrency mining. Recently, the computing power of Bitcoin miners, both newbies and longtime miners, reached a new all-time high.
In fact, the decrease in energy costs, the use of newer and more efficient mining machines, as well as the moderate increase in prices, contributed to the increase in the computing power of Bitcoin miners, which reached a record high on May 31st. , according to Bloomberg’s June 1 report and data from BTC.com.
Specifically, that figure reached 51,234,338,863,442 or about 51.23 trillion at the end of May, with an average daily hash rate of 422.24 EH/s. Meanwhile, the platform projects that the next estimated difficulty will be around 51.29 trillion, demonstrating an increase of 0.10%.
Why is mining difficulty increasing?
As highlighted in the Bloomberg article, “the biweekly update saw a 3.4% increase after a 3.22% increase in the last period,” indicating that mining difficulty “has been on the rise with only two small declines this year.”
According to the article, “a steady recovery of the digital asset this year, a drop in electricity costs and a new wave of more efficient machines” have driven the new record in Bitcoin mining difficulty. As Wolfie Zhao, head of research at TheMinerMag, a research arm of cryptocurrency mining consultancy BlocksBridge, explained:
“Bitcoin miners are enjoying cheaper electricity ahead of summer. (…) Newer and more efficient machines also generate more computing power with the same amount of energy.”
Measured on a scale from zero to infinity, mining difficulty refers to the level of difficulty faced by miners in verifying transactions, grouping them into blocks, and adding them to the blockchain. It increases and decreases based on the number of miners competing on the network and is corrected every 2016 blocks.
Typically, miners aim to find a new block every 10 minutes, and mining difficulty increases when miners are validating new blocks more frequently than the 10-minute average, while decreasing when they find new blocks less frequently.
Hash rate on the rise
At the same time, the more miners competing for a correct hash on a network, the higher the hash rate. Bitcoin’s hash rate has also been on the rise, indicating an increasing number of miners on the network, especially following the Chinese government’s 2021 ban on cryptocurrency mining.
Indeed, Bitcoin’s hash rate recently skyrocketed to 350 million terahashes per second (TH/s), up from around 75 million at the end of 2021, when a sharp drop occurred after the ban, according to the chart shared by Bitcoin Magazine on June 1st.
At press time, Bitcoin is trading at a price of $27,085, up 0.77% over the past 24 hours and up 2.43% over the past seven days. However, the most recent charts, obtained by Finbold on June 2, indicate a 5.52% drop in the last month.
As the next Bitcoin halving event approaches, which will halve the reward for mining new blocks, more miners are likely to join the effort, while current miners will step up their efforts to earn as much as possible before then.
At the same time, experts predict that the event will also trigger an upward movement in the pioneer cryptocurrency’s price.
