Mining blocks on the Bitcoin network has become more difficult over time, reflecting the network’s increasing security and resistance to attacks.
The rise in Bitcoin’s hash rate, which recently hit a new record high, is a key indicator of this trend.
According to Blockchain.com data, the hash rate hit an all-time high of 845 million terahashes per second on February 8, a 43% increase compared to last year.
While this growth enhances the network’s security, it also increases the difficulty of mining blocks, posing additional challenges for miners.
The rise in hash rate and its impact on mining activity:
The hash rate represents the total computing power that mining devices contribute to the network to process transactions and produce blocks.
As it rises, mining becomes more competitive, requiring more powerful equipment and higher energy consumption.
Meanwhile, the difficulty of Bitcoin mining increased by 5.61% over the past week to 114.17 trillion, according to CoinWarz data.
The mining difficulty changes every 2016 blocks (about two weeks), and reached an all-time high at block 883008, with a new adjustment expected at block 885024 with an estimated increase of 1.69%.
How are miners dealing with these challenges?
YCharts data indicates that daily Bitcoin mining revenues have been declining in tandem with the rise in hashrate and mining difficulty.
Revenues reached $43.52 million at the time of writing, down 10.48% in the last 24 hours and 7.3% compared to last year.
Bitcoin price is a major factor affecting miners’ profits.
Despite the optimistic forecasts, the coin is still struggling to break the $100,000 barrier, having remained below the $98,000 level since last Friday.
With operating costs rising and profits declining, miners are facing increasing pressure to keep their operations going, especially given the need for additional investments in energy and advanced equipment to keep up with the increasing competition in the mining industry.
