Bitcoin is doing quite better in its price, which boosted the confidence of many crypto investors. Still, with the most traded cryptocurrency, Bitcoin, the hard part is mining it. As an estimate indicates that the next Bitcoin mining difficulty will show a jump of almost 10%.
The winter storm in the United States may stop, but the hashrate is back online. And furthermore, implementations of newer and more efficient machines seem to justify the huge increase.
And this weekend Bitcoin miners are almost ready for a big jump in difficulty. The increase could be around 10% as estimated by some of the Bitcoin mining companies.
The difficulty can be understood by the complexity of the computational process behind the mining. This is adjusted almost every two weeks based on the average block time.
According to BTC.com, the difficulty dropped 3.59% in the last update, which seems to have followed a winter storm that caused several miners to go out. Or it may be due to price incentives or requests from network operators.
Now much of that hashrate appears to have come back online, along with newly deployed and more efficient machines.
Daniel Frumkin, research director at Braiins, said: “It’s a combination of the institutional miners scaling a bit over that longer period of time and some positive variance.
“But because of the winter storm, we wouldn’t have seen any of that in the earlier era, which means now we’re seeing ~3 week deployments instead of just one,” Frumkin said.
Also, companies like Marathon and Hive Blockchain have been continuously deploying efficient machines like S19 XP and BuzzMiners on a large scale. “There’s probably a bit of positive luck on the part of the groups as a whole that is contributing to this big adjustment,” Frumkin further said.
Furthermore, Hive blockchain has installed new Intel chips in its miners. A distinctive feature of the chip is that it allows mining companies to develop devices according to their own specifications and improve the efficiency of the miner as a whole.
According to Glassnode, the leading blockchain data and intelligence platform, noted that Bitcoin Miners Network Flow Volume (7d MA) just hit a 1-month low of -30,921 BTC. And the previous 1-month low of -29,686 BTC was observed on January 14, 2023.
In the midst of the current macroeconomic context, rising interest rates, reduced liquidity, and declining risky assets, it is time for the cryptocurrency industry to take the above steps. So this volatility and the incorporation of financial tools will generate sustainability and certainty. It is appropriate behavior for any fiduciary running a Bitcoin mining company.
Nancy J. Allen is a cryptocurrency enthusiast who believes that cryptocurrencies inspire people to bank themselves and move away from traditional monetary exchange systems. She is also intrigued by blockchain technology and how it works.