On-chain data shows the Bitcoin miners will have an easier time starting Sunday as the network Difficulty is set to see a correction.
Bitcoin Mining Difficulty Will Drop In Upcoming Adjustment
The “Difficulty” refers to a feature built into the Bitcoin blockchain that controls how hard the miners would find it to mine a block on the network. The metric’s value changes about every two weeks in events known as adjustments.
Adjustments are entirely controlled by the cryptocurrency’s code, meaning no human gets to decide how the Difficulty should change in any such event. Satoshi wrote in one simple guideline for the network to follow when performing adjustments: the block time, the average amount of time miners take to mine a block, must stay constant at 10 mins.
This means that whenever the miners mine at a rate faster than this standard, the blockchain responds with an increase in Difficulty in the next adjustment. Similarly, it makes mining easier if miners are taking more than 10 mins per block.
Now, here is what data from CoinWarz says regarding how the Bitcoin network stats have been looking heading into the next adjustment, which is set to go live this Sunday:
Looks like the chain has been performing slower than intended recently | Source: CoinWarz
As is visible above, the Bitcoin block time has averaged at 10.27 minutes since the last adjustment, meaning the miners have been slower than what the blockchain requires.
In order to get the chain validators back up to speed, BTC will decrease its Difficulty by around 2.6%. Note that this value is only an expectation based on the block time so far; the real value might be different depending on how the miners perform over the next two days.
These last two weeks the miners have had to face the hardest network Difficulty ever, as the previous adjustment took the metric to a new all-time high (ATH) with a sharp jump.
Below is a chart that shows all the changes the indicator has gone through during the last six months.
The Difficulty is currently sitting at an ATH | Source: CoinWarz
Miners become ‘faster’ or ‘slower’ when they change the amount of computing power that they have connected to the network. This collective power of the miners is known as the Hashrate.
The upcoming change in the Difficulty is also in response to such a change in the Hashrate. Here is a chart from Blockchain.com, that shows the trend in the 7-day average value of the metric over the past year:
Looks like the value of the metric has been climbing up in recent days | Source: Blockchain.com
As is apparent from the graph, the Bitcoin Hashrate rose to an ATH earlier in the month, which is what pushed the network into taking the Difficulty to a new ATH as well. Following this peak, though, the metric observed a plunge, which is why the miners have been slower in the last couple of weeks.
The Hashrate has once more been climbing up in the last few days and it’s possible that the rise would only further once the Difficulty drops on Sunday.
BTC Price
At the time of writing, Bitcoin is trading around $96,900, down around 2% in the last week.
The price of the coin seems to have plunged in the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Blockchain.com, CoinWarz.com, chart from TradingView.com
Source: Bitcoin Miner Relief Incoming: Difficulty Drops 2.6% Sunday
