Bitcoin Mining Difficulty Hits New Record as Halving Approaches

Bitcoin mining difficulty has surged nearly 4%, reaching an all-time high of 86.4 trillion hashes following the latest adjustment just ahead of the upcoming halving event next week.

Bitcoin mining difficulty continues to set new records as halving approaches

According to blockchain monitoring tool Mempool, after the latest adjustment at block height 838,656, Bitcoin mining difficulty rose by 3.9% to a new record of 86.39 trillion hashes.

Technical mining difficulty achieves record high of 86.39 trillion hashes after adjustment on 11/04/2024. Source: Mempool

Meanwhile, the network's average hashrate has reached 657.87 EH/s, marking a 3.92% increase from the previous peak of 618.77 EH/s at the end of March.

Statistics on Bitcoin mining difficulty adjustments from October 2023 to 11/04/2024. Source: explorer.btc.com

Bitcoin mining algorithm difficulty is a mechanism inherent to the world's largest cryptocurrency network. Every 2,016 blocks (approximately every two weeks), the mining algorithm adjusts to maintain an average block generation time around the target of 10 minutes. An increase in hashrate indicates more active miners, prompting the system to increase difficulty, and vice versa.

However, while miner revenues have increased this year due to rising Bitcoin prices, the impact of halving on less efficient mining operations and thus the overall network figures after the reduced rewards remain somewhat uncertain.

From mid-2021 to the present, Bitcoin mining difficulty has continuously risen from 13 trillion hashes, consistently setting new all-time highs.

Bitcoin mining algorithm difficulty fluctuations (in blue) and BTC price (in black) since April 2021. Source: Blockchain.com

Halving is another automatic mechanism of Bitcoin designed to create deflationary pressure. Every 210,000 blocks, the block reward for miners is halved.

Bitcoin has undergone three halvings in its history:

• The first Bitcoin halving occurred on November 28, 2012, reducing the block reward from 50 BTC to 25 BTC.
• The second Bitcoin halving occurred on July 9, 2016, reducing the block reward from 25 BTC to 12.5 BTC.
• The third Bitcoin halving occurred on May 11, 2020, reducing the block reward to 6.25 BTC.

In the upcoming halving event, the block reward will decrease from the current 6.25 BTC to only 3.125 BTC. Halving events will continue until the last Bitcoin is expected to be mined around the year 2140. After that, miners will only earn transaction fees.

According to The Block's Bitcoin Halving countdown, the next halving event is estimated to occur around 11:00 AM (Vietnam time) on April 20, 2024.

Countdown to the April 2024 Bitcoin halving event. Source: The Block

Historically, Bitcoin halvings have been associated with significant price volatility for the cryptocurrency. While not a direct cause, these events often precede substantial price increases in the Bitcoin market.

Bitcoin is currently trading around $70,200 USD, up approximately 3% in the past 24 hours following the US CPI "market red" news. Year-to-date, this marks an increase of over 65%.

1-hour chart of BTC/USDT pair on Binance at 09:00 PM on 11/04/2024