Cryptocurrency mining difficulty (difficulty) is a special parameter of the Proof-of-Work (PoW) calculation algorithm, which affects the search time for a new unique block (hash).
The probability of finding a block decreases as the difficulty increases, and as it decreases, a new block is determined faster. The difficulty of mining top cryptocurrencies is growing all the time.
Thus, the ever-increasing complexity of the cryptocurrency network protects it from the “51% attack,” when the computing power of one miner allows him to independently confirm his own blocks and thus change the data in the blockchain and block all third-party transactions.
What affects difficulty?
The Bitcoin mining difficulty parameter is designed to protect the asset from depreciation, so an increase in hardware productivity leads to an increase in difficulty. It varies depending on a number of factors:
- Equipment hashrate. The limit automatically increases as more productive installations become available. For example, since 2014, the market has been flooded with ASICs that support high hash rates that exceed the power of the GPU. The complexity automatically increased, the profitability of installations decreased.
- Bitcoin rate. An increase in the value of a coin leads to the emergence of new mining farms, the total hashrate of the network grows, and accordingly the difficulty automatically increases.
- External factors. An increase in the total network hashrate can be triggered by miners switching to mining this cryptocurrency as more profitable, the opening of new cryptocurrency exchanges, and positive forecasts from analysts.
According to the features of the SHA-256 algorithm, the difficulty of Bitcoin mining automatically changes every 14 days, after the next 2016 blocks are signed. The search duration for each hash is ten minutes.
The growth of the complexity of the Bitcoin network - table and graph
The increase in the complexity of Bitcoin can be seen on various sites on the Internet.
One day, the creator of digital money, Satoshi Nakamoto, sat down at his computer and mined about 2 million crypto coins, thus creating the initial circulation of bitcoins. Then the rate of electronic funds began to rise continuously and a period of mass coin mining began. It wasn't difficult, and users didn't have to look through pool reviews or buy additional equipment. The power of the Bitcoin network increased after a short period of time, and experienced enthusiasts began to use video cards that help increase productivity. People with video cards gathered at home or in a cafe and together earned a fortune. Mining overnight simply turned into a profitable business that requires special costs and effort.
| Month | Complexity |
| January | 392 963 262 344 |
| February | 440 779 902 287 |
| March | 499 635 929 817 |
| April | 521 974 519 554 |
| May | 595 921 917 085 |
| June | 711 697 198 174 |
| July | 860 221 984 436 |
| August | 923 233 068 449 |
| September | 1 103 400 932 964 |
| October | 1 452 839 779 146 |
| November | 1 347 001 430 559 |
| December | 1 590 896 927 258 |
The video cards could not withstand the load and were replaced by ASIC chips; they are intended only for mining bitcoins. The chips are quite expensive, but they consume less electricity and heat up less when working with cryptocurrency.
Now people are divided into 2 groups: the first invest effort and money to earn more btc; the latter try to get coins on their own without investing material resources. The second group comes to the aid of data centers that rent out their powerful equipment for short-term and long-term rent.
Depending on changes in the stabilization indicator, the payment to miners is constantly changing. For each closed block the user receives a cash reward. In 2008-2012, the reward was 50 bitcoins, in 2016 – 12.5 bitcoins. A decline is forecast again in 2022.
Until October 2022, the table shows how difficulty is growing, then in the penultimate month of the year there is a sharp decrease in the indicator. This is due to the fact that one of the largest mining pools was disabled. But in December one can observe a radically different picture – the indicator has increased significantly and continues to grow. An increase in the difficulty of coin mining due to the November decrease in the MTC stabilization indicator is not expected.
For the efficiency of mining, people use calculators for calculating the complexity of the Bitcoin network and calculators for mining payback for various types of devices and equipment (the feasibility of using nvidia and amd video cards is assessed).
The bitcoin stabilization chart has one important pattern: the more people use cryptocoins, the higher the level of complexity of the bitcoin network becomes. The greater the bitcoin stabilization rate, the faster the rate begins to grow.
Where to find out the difficulty of mining cryptocurrencies
When mining, you need to take into account the increase in the complexity of the mined coin. This will help to more accurately calculate the income and overall profitability of the mining farm. You can make a forecast for the growth of the complexity of a cryptocurrency, for example, Ethereum, by studying its timeline. The difficulty of mining each specific cryptocurrency can usually be found on its website - a blockchain explorer, where transactions, found blocks and other important network parameters are tracked.
Eth mining can be found on the website https://etherscan.io in the Difficulty .
Dash mining difficulty can be found at https://explorer.dash.org/insight/status.
The difficulty of mining ZCash is indicated on the website https://explorer.zcha.in.
Official websites do not always provide the ability to graphically display mining difficulty over a long period of time. It is convenient to track the most famous cryptocurrencies on the Russian-language resource https://bitinfocharts.com/ru, where you can study the graph of the mining difficulty of the selected cryptocurrency, scale it over the required period of time, and also study many other parameters important for mining and trading.
To more accurately calculate the profitability of cryptocurrency mining, it is necessary to use calculators that take into account possible changes in the complexity of mining. As a rule, these are online pages with built-in programs that automatically calculate mining income for a certain period of time. Depending on the calculator you use, the number of parameters you enter may vary, but the basic set of important data is approximately the same. To accurately calculate the earnings and profitability of a farm, the following data is usually entered:
- current mining difficulty and forecast for its changes;
- hashrate of existing equipment;
- reward for the found block;
- commission when using the pool;
- cost of equipment;
- consumed electricity and its cost;
- the period of time for which the calculation will be made;
- depreciation of equipment (as a percentage);
- the exchange rate of the mined cryptocurrency and the forecast for its changes.
Good calculators that take into account the increasing difficulty of mining are presented on the following sites:
- whattomine.com – for almost any cryptocurrency;
- bits.media/calculator - for Bitcoin;
- cryptocompare.com/mining/calculator/ - for the 7 most popular cryptocurrencies.
How difficulty changes
The difficulty of mining within the Bitcoin network can increase endlessly until the very last coin is mined. At the same time, the rate at which difficulty increases can also increase. Today, the level of difficulty in mining coins in the Bitcoin network has risen to such a level that the production of each new coin takes a lot of time and requires very powerful equipment. For many miners, this is a critical factor: not everyone has the opportunity to purchase such expensive equipment or upgrade old ones.
Also, in theory, the difficulty can decrease if the system sees that blocks are being mined too quickly. In practice, this almost never happens; since 2015, this situation has occurred only five times. There is a steady trend towards increasing complexity.
In June 2022, according to Blockchain.com, the figure reached 7,868,124,124,773, which was a new record since the fall of 2022. The hashrate was 56,000,000 Th/s, which is slightly lower than previous values. Thus, the network has become more secure than ever, but competition between miners is at a critical level.
Mining prospects taking into account the dynamics of growth in computing power
Due to the fact that the development of technology constantly leads to the emergence of new, more powerful computing devices with lower power consumption, in the long term, a constant increase in the complexity of mining is natural.
The constant growth of computing power on a global scale has a negative impact on the income of miners engaged in mining cryptocurrencies using the PoW . The increase in the overall network power is inversely proportional to the income of each individual mining farm owner. The situation is aggravated not only by this, but also by the instability of prices of major cryptocurrencies.
Maintaining a constant level of mining income requires periodic increases in productivity, which can only increase significantly when purchasing new devices. Currently, this is a rather risky activity, given the lack of confidence in their payback while maintaining the current position in the cryptocurrency market.
Why you need to consider Bitcoin mining difficulty
First of all, complexity affects the profitability of mining. That is, it depends on what equipment is needed for effective mining. If there is not enough power, then costs will exceed income.
The miner must find out the hashrate of his technical equipment - this is how he will determine the approximate profit for the period under review. The calculations will not be exact, but will provide an approximate picture. Typically, special profitability calculators are used for this purpose.
Natural limitation of Bitcoin mining
Miners seeking to increase profits and mine more bitcoins buy more powerful computing equipment - specialized devices called ASICs. Most users join pools for collective mining, which increases the likelihood that at least someone will discover a block and share the reward. For such work you will need special and properly configured software and stable Internet access.
The creators of Bitcoin laid down certain mechanisms for regulating the network. If the number of miners increases, then in the case of a limited number of coins, they may be exhausted ahead of schedule. To prevent this from happening, there are only 3 options:
- Increase the number of coins - however, this will lead to a drop in the rate.
- Limit the number of transactions or miners. This situation can lead to the cessation of system development. Mining will become futile, and coins will depreciate.
- Making Bitcoin mining more difficult - thanks to the increase in mining difficulty, mining will stabilize. This is the regulatory option chosen by the creators of Bitcoin.
In 2022, the hype around the BTC coin led to a noticeable increase in the exchange rate: for 1 bitcoin on the cryptocurrency market they gave up to $20,000. The number of participants in the process increased tenfold, which led to a sharp increase in the complexity of the network.
The downside of such natural regulation is a decrease in the profitability of the miner. A participant in the Bitcoin mining process is left with two options: continue to earn without changing productivity or purchase additional equipment. In the first case, the miner’s income decreases in proportion to the increase in difficulty: a hashrate that doubles will lead to receiving half as many bitcoins. If the exchange rate does not change, the payback period for mining equipment will also increase. In the second case, the miner buys or assembles one or more additional farms, increasing the mining speed - although in order to make the first profit, you will first need to wait until the equipment pays off.
Proper use of information about the complexity of the network allows you to correctly respond to changing situations. Mining each coin requires its own individual approach - choosing specific equipment, calculating the energy consumed and, ultimately, calculating profitability.
How the myth of ever-increasing complexity was born. Halving
All cryptocurrencies started with Bitcoin. The number of bitcoins to be released is 21 million. The miner's reward for a found block is constantly decreasing. This process is called halving, from the English “Half” - “half”. Every 210,000 blocks - approximately 4 years - a halving occurs in the Bitcoin network, the reward for 1 block is reduced by 2 times.
Today miners receive 12.5 BTC per block. The next halving is expected in 2022, the block reward will decrease to 6.25 BTC. Accordingly, now 1800 new bitcoins are generated per day, but in 2020 there will be only 900 new bitcoins daily. After another 4 years, the reward will decrease again.
If we assume that the network hashrate is constant, then over time the same mining equipment will bring in fewer and fewer coins. This statement is true. However, such changes do not occur gradually, but in leaps and bounds - approximately once every 4 years. Halving does not in any way affect the complexity of the cryptocurrency network. The difficulty does not change, there are simply fewer coins in the block.
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What is hashrate
Computing power is determined by the number of solutions sent to the server by the mining farm equipment to generate a new block of data. Each correct decision (share accepted) corresponds to the established hash code and can become a digital signature that closes the next crypto block.
The speed of performing cryptographic operations on special devices or PC components determines the hashrate of the mining installation of a particular owner. And the total power of the “miners” involved in the process of mining a particular cryptocurrency is the hashrate of the blockchain network.
Conclusion
Changes in mining difficulty are closely related to the technological factor. Miners are interested in bringing new high-performance equipment to the market, and they are also trying to reduce electricity costs as much as possible - find free sockets or locate the farm in regions with low electricity costs. Cloud mining also remains relevant.
As long as someone is engaged in mining, the difficulty will increase. This will reduce the profitability of the process, home mining will become obsolete as a phenomenon, and those interested will go to exchanges or altcoin mining. And Bitcoin mining will remain at the mercy of large-scale corporations that have enough funds and physical space to install hundreds of pieces of equipment.
How is hashrate measured?
Hashrate is a variable value; its numerical value is expressed by the number of hashes (h) per second. Thousands, millions, and billions of calculations are performed to find the desired hash code. Decoding the main indicators of device hashrate:
- Kilohesh (kH/s) – 1000 H/s;
- Megahash (MH/s) – 1000 kH/s;
- Gigahash (GH/s) – 1000 MH/s;
- Terrakhesh (TH/s) – 1000 GH/s;
- Petahesh (PH/s) – 1000 TH/s;
- Exahash (EH/s) – 1000 PH/s.
In the blockchain ecosystem, the hashrate of most collective mining pools is measured in petahashes and exahashes. In general, the Bitcoin network hashrate is currently 147 EH/s.
Bonus. Transaction speed does not depend on network hashrate
In addition, we debunk another myth: “If miners leave the Bitcoin network or any other cryptocurrency, the hashrate will drop, transaction processing speed will decrease, and the network will stop.”
Don’t worry, even one miner with the most “dead” processor is enough for the Bitcoin network to exist. The speed of coin transfer will be the same regardless of the number of miners: there can be either one miner or 50 million ASICs in the network.
Source: Worldsmarathons
The increase in the number of mining equipment only creates additional competition in the fight for 144 Bitcoin blocks per day. By the way, the more ASICs, the safer the network, the more difficult it is to attack.
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What does hashrate depend on?
The hashrate of a mining rig depends on the computing potential of the components. Its level is also affected by:
- mining program settings;
- correct assembly of the truss;
- stability of connection to the server and the power grid.
Depending on the calculation algorithm, the hashrate of a specific video card can differ significantly. The reason for this is the design features of devices from different manufacturers. Specialized ASIC devices are generally produced only for a specific mining algorithm.
Where can I see the cryptocurrency difficulty chart?
It is best to look for up-to-date information on the state of the difficulty of mining cryptocurrency on the official websites of currencies. However, this can be difficult. Links to mining statistics are sometimes difficult to find even on official websites.
To simplify the process, websites aggregators of statistical information about all cryptocurrencies have been created. They collect, process and publish current data not only on the difficulty of mining, but also several dozen other indicators: price, capitalization, hashrate, profitability, number of transactions, and so on.
The complexity of hash calculations is constantly calculated for all cryptocurrencies whose mining is relevant. To obtain information about the current difficulty of mining, you can use aggregator sites that collect data in real time or official sites of crypto coins.
Aggregator sites
The problem is that the real hashrate is highly dynamic. Accordingly, the accuracy of the data in the tables is low. You can find out more accurate numbers using current information from several sources.
For Russian farmers, the resource bitinfocharts.com, adapted for the Russian language, is useful. Advanced users who are familiar with official English terminology are better off using more accurate analytical summaries from coinwarz.com and similar resources.
Here are direct links to data on the difficulty of mining the TOP-8 cryptocurrencies by capitalization:
It should be taken into account that the difficulty of mining changes over time, so different sites may provide different data on the difficulty. Sometimes the difference reaches 10-20% by currency on two different aggregators. If you are looking for an indicator of mining difficulty not just to satisfy curiosity, but for practical purposes, then focus on the average numbers.
For example, if you are making a forecast of changes in mining difficulty in the future based on historical dynamics, then it makes more sense to take data for the last six months to a year, rather than two to four weeks.
A number of cryptocurrencies cannot be mined in the traditional sense. Some use POS mining, in which interest is periodically accrued on the coins in the wallet. For POS mining you do not need to buy specialized equipment and spend money on electricity. Other cryptocurrencies (for example, Ripple) have already been fully mined and are only redistributed between owners.
These and similar sites display the daily dynamics of mining difficulty indicators. Fluctuations in Bitcoin vary by up to 15% per day, in Ethereum - up to 4%. Such differences in interest are explained by the high volatility of the cryptocurrency market as such.
If you spend time monitoring the indicators, you can personally see a couple of patterns:
- involving a large number of users in the process complicates mining;
- the rise and fall of difficulty directly depend on fluctuations in the market rate, which changes the demand for the coin.
Bitcoin chart
The increase in complexity is due to a number of factors that are closely interrelated:
- development of ASIC chips and entry into the market of more productive models;
- popularization of Bitcoin and the influx of new miners;
- high return on investment in mining due to the rapid growth of the Bitcoin exchange rate against the dollar;
- transfer of computing power from other currencies whose quotes are falling or growing slower than Bitcoin;
- other factors.
The difficulty of mining Bitcoin has increased 5-6 times since 2016. Growth continued almost uninterrupted. Only in August 2022 was there a decrease in the indicator for the first time in a year. Perhaps this was influenced by the August SegWit of Bitcoin, which forced some miners to transfer power to altcoins.
There were no sudden spikes in difficulty throughout the year. Although the difficulty of mining was continuously increasing, the changes were relatively smooth.
At the end of October, for the first time since 2015, difficulty showed a jump of 21% from the level of 1,196,792,694,099 to 1,452,839,779,146. The reason lies in a significant increase in the total hashrate of the network from 8 to 10-11 million terahashes
This caused heated discussions in the crypto community. Probably, the jump in complexity is due to the commissioning of a large number of ASICs by one of the equipment manufacturers.
Let's try to figure out the mining difficulty graph. You could already see - it is like a ladder and changes in sharp “jerks”, after which it remains unchanged for some time. You correctly note - this parameter changes once every 2-week period. Now the most interesting thing is why and how is this indicator changing?
Everything here is quite simple - when creating the Bitcoin system, the developers set a specific number of bitcoins that would have to be mined in 2 weeks.
If during this time you suddenly extracted more of them than expected, mining costs will increase so that the extraction of electronic money will not proceed so quickly. If during this time fewer bitcoins are received than expected, the parameter drops and bitcoins are mined faster.
But to the greatest extent, the complication of Bitcoin mining is due to the increase in the exchange rate against the dollar. The rising exchange rate makes investing in mining equipment profitable.
The increase in complexity and drop in income in cryptocurrency is compensated by an approximately proportional rise in the price of the BTC coin. The payback period for ASICs is 8-12 months, which attracts investors. A large number of investors purchasing mining equipment increases the total hashrate.
On January 1, 2022, the Bitcoin mining difficulty was 317,688,400,354 at an exchange rate of $1,000. Over the 11 months of 2022, it has already grown to 1.452.839.779.145, that is, 4.6 times. But the BTC/USD rate also changed from $1,000 to $6,600, that is, 6.6 times.
Perhaps, it is already clear that if the difficulty of obtaining coins changes, its price will also change, but there is also an inconsistency - there is no direct relationship between these values. Of course, it is logical that the more difficult it is to obtain a cryptocurrency, the higher its value should be, but still the prices for Bitcoin are explained not only by complexity, but also by demand and other motives.
I would like to add to what has been said: perhaps not everyone knows, but the Bitcoin algorithm also states that it halves approximately every 4 years. At the same time, every 4 years the miner’s reward will sharply decrease by exactly half - everyone will begin to receive 2 times less BTC with the same amount of capacity.
This process, of course, also affects the value of the cryptocurrency, for example, the previous time, when there was such a halving, the price of BTC increased from $12 to $1000 in a few months.
Difficulty and hashrate increases
The network hashrate directly depends on the number of miners working in it. The more miners mining the same coin, the faster the computational complexity increases.
How does network complexity change? Let’s say that at the moment a certain difficulty indicator has been established in the blockchain ecosystem, and the conditional hashrate of the network of this cryptocurrency is 126 EH/s. The hashrate of any cryptosystem is always equal to the total power of the mining installations connected to it. With increasing demand for virtual, its price and mining profitability increase. More and more new users begin to mine the coin, the network hashrate increases, and the system complicates the calculation process. As a result, the decryption time of a new cryptocurrency block is equalized to the value inherent in the program code.
If the value of a currency falls and miners leave the network, its hashrate, and therefore the complexity of calculations, decreases, allowing preset parameters to be preserved. However, this method is effective only up to a certain point. A large hashrate loss paralyzes the mining network because miners not only generate new crypto coins, but also process transactions. The system stops functioning, and the coin gradually dies, this has happened more than once in the history of the blockchain industry.
The hashrate of mining devices is a parameter that directly affects the profitability of mining. Its level fluctuates constantly, but the average value is usually within the mining capabilities of an electronic miner. For video cards, performance can be increased by modifying the basic input/output system (BIOS) installed on the device and increasing the clock frequency and power limit parameters. Overclocking a video card is done using the MSI Afterburner . It is necessary to gradually increase the frequency of the memory and core, selecting values at which the video card demonstrates the maximum hashrate without loss of stability.
Owners of gpu rigs (elements of a mining farm consisting of one motherboard and several mining boards, for example, video cards) and ASICs try to get the most out of their equipment, increasing the speed of calculations. But it should be taken into account that the effect of overclocking can negatively affect the real hashrate. The mining rig will quickly sort through possible options for solving a cryptographic problem, but the number of confirmed shares will be slightly less than with moderate overclocking. And on top of this, the device will consume more energy and be subject to increased wear and tear.
The efficiency of mining is always determined by pool statistics and depends on the ratio of the level of network complexity and the computing power of the farm. The number of calculations performed, sent over a short period of time (for example, 1 hour), may not coincide with the speed of calculations. But the average hashrate on a pool is always more or less equal to the speed of enumeration of solutions displayed in the terminal of the mining utility. If these indicators differ by more than 10-12%, then the rig owner has problems working with this pool. And if it is impossible to solve them, it is better to look for another collective mining server.
What factors does complexity depend on?
This process is based on computers, the main purpose of which is to solve mathematical algorithms. It was with the help of a computer that Bitcoin was created. Bitcoin cryptocurrency is electronic money that is stored in a personal wallet. The number of coins may vary due to a number of factors. The owner replenishes his wallet and easily withdraws money at any convenient time.
The difficulty of mining bitcoin arises from the difficult operation of the network. Any transfers that a person makes are saved, then divided into interconnected chains and transferred to miners. From numerous combinations, you need to choose only 1 hash that matches all new translations and the secret key. The minimum one-time reward is 12.5 bitcoins.
Sometimes you have to fight for the reward because everyone wants to guess the hash and get the money. When the hash is found, the block is closed with all the transfer data. Then the block changes and a similar process begins (it is cyclical).
The stabilization of BTC increases after a certain period of time and this increase depends on several factors: first, the hash consists entirely of the last processed blocks; second – the number of transfers over the last 600 seconds is taken into account; third, one of the conditions of the system is the presence of a random number, which is constantly changing.
The complexity of a currency is determined by these factors. Bitcoin difficulty changes twice a month, namely once every 14 days. The main task of the miner is to keep the service afloat. To maintain it, competent translations are carried out and the agreement on a unified state of the exchange is not violated. By observing the agreement and other conditions, cryptocurrency is transferred to the miner; it can be easily converted into real (real) money.
Dynamics of changes in Bitcoin hashrate
Bitcoin hashrate chart (2009)
In the first year of Bitcoin's existence, network capacity was extremely meager compared to today's performance. At that time, hashrate was measured in megahashes/sec (MH/s), i.e. in millions of hashes.
At first, this figure was supported by the equipment of the developers and a handful of enthusiasts close to them. Because of this, in the first month of 2009, the Bitcoin hashrate was very unstable (4.5–10 MH/s). Then, until June, the network power became more stable and was generally equal to 5–6 MH/s, occasionally going beyond this range.
In June, the hashrate dropped sharply and remained in the range of 1–4.5 MH/s for six months. In December, against the backdrop of the launch of the first Bitcoin trading platform New Liberty Standard and the expansion of the circle of people aware of the first cryptocurrency, there was finally a sharp jump to 10 MH/s, which marked the beginning of a steadily rapid increase in the network’s computing power.
Bitcoin hashrate chart (2010–2012)
The next year and a half saw an exponential increase in hashrate, triggered by the popularization of Bitcoin due to mention in some online media and the launch of the first full-fledged crypto exchange MtGox in July 2010.
The increase in capacity slowed down near the 10 TH/s mark only after the hacking of that same exchange in June 2011. A month and a half later, hackers attacked the MyBitcoin wallet, after which the Bitcoin rate went into a downtrend until December, during which the hashrate dropped to 7 TH/s.
Throughout 2012, the network power gradually grew (in proportion to the movement of the BTC rate) and by the time of the first Bitcoin halving (November 28) it reached 29 TH/s. The halving of the reward scared off some miners, causing the hashrate to drop to 18 TH/s in just 2 weeks.
Bitcoin hashrate chart (2013–2015)
During the first half of 2013, the network capacity increased 10-fold and reached 200 TH/s (during this time Bitcoin rose in price from $14 to $266). Then, over the remaining time until the end of the year, the hashrate grew even more rapidly and reached 17 PH/s (by this time Bitcoin was trading at $1240).
Throughout 2014, despite the bearish trend in the market provoked by a new hack and closure of the MtGox exchange, there was a smooth increase in the computing power of the Bitcoin network to the level of 300 PH/s.
In January 2015, the Bitstamp cryptocurrency exchange announced the loss of 19,000 BTC due to a hacker attack. This event set the tone for the whole year - the Bitcoin rate consolidated in the $200–300 corridor, and the hashrate slowly approached the 400 PH/s mark.
At the end of October, the EU's High Court exempted Bitcoin holders from taxes on the sale of cryptocurrency, which provoked a surge in the price of BTC to $500. This gave impetus to a new wave of Bitcoin popularization and, as a result, accelerated the growth of network capacity to 770 PH/s by the end of the year.
Bitcoin hashrate chart (2016–2017)
At the end of January 2016, the hashrate reached 1 EH/s (1000 PH/s) for the first time. During that year, Bitcoin doubled in price (from $500 to $1000). The same thing happened with computing power - by December it doubled, and the hashrate surpassed the 2 EH/s mark. Interestingly, miners did not pay attention to the halving that occurred in mid-2016 and continued to increase the productivity of their equipment.
In the first half of 2022, there was an acceleration in hash rate growth (active preparations were underway for “that same bull run,” i.e., the bull market). By August, it reached 7 EH/s and then fell to 4.3 EH/s due to the transition of some miners to the mining of Bitcoin Cash, a coin that appeared as a result of the Bitcoin hard fork.
Over the next three months, the network capacity almost tripled (11.5 EH/s). By this point, the Bitcoin price had reached $8,000 amid extensive media coverage and the pending SegWit2x hard fork, after which there was a short-term price correction to $5,800 and a decrease in hashrate to 4.9 EH/s. Until the end of the year, the Bitcoin rate continued to grow rapidly to the $20,000 mark, attracting more and more attention from miners, who managed to increase their computing power to 15 EH/s in just a month.
Bitcoin hashrate chart (2018–2019)
2018 began with negative news about the closure of crypto exchanges in South Korea, accompanying the beginning of a downtrend, from which the market ultimately could not escape for more than a year. Despite this, the Bitcoin hashrate continued to grow non-stop until October, reaching 58–60 EH/s. Mining with this hashrate remained profitable while Bitcoin was trading above $6,000.
The situation changed on November 14, when the Bitcoin rate sharply dropped below the mentioned level and continued to fall until mid-December, stopping at $3,100. By this time, a significant part of the miners had disconnected from the network, unable to withstand the pressure of the bears, and the network’s computing power had decreased to 35 EH/s.
During the first four months of 2022, as Bitcoin consolidated below $4,000 and then unexpectedly rose to $5,000–$5,600, hashrate rose slightly and remained in the 40–50 EH/s range.
In mid-May, the price of BTC finally rose above $6,000 again, and then reached $8,000, restoring faith in the “tuzemun” (flight to the moon). Miners began to more actively return their equipment to the network, and the total computing power for the first time returned to the maximum value of last year - 58 EH/s. Then I tried to overcome the $9,700 mark, and the hashrate then increased to 65 EH/s. For the rest of the year, the hashrate changed roughly in proportion to the price and reached 98 EH/s by the end of the year.
Bitcoin hashrate chart (2020)
In 2022, the active growth of the price of Bitcoin began again - the price increased from $7,200 to $18,700. The network hashrate has also increased significantly - from 98 EH/s to 126 EH/s.
Considering the statistics of past years, the growth of computing power should continue. The only difference can be in its pace, which will depend on further movements of the Bitcoin rate.
How has the complexity and volume of the Bitcoin network changed the income of miners?
Crypto miners constantly monitor the difficulty of mining, because their income depends on it. The amount of the monetary reward is inversely proportional to the stabilization indicator on the stock exchange. To become a little richer with the help of your personal computer, you need to use all possible computing power, which will quickly carry out calculations and help obtain electronic material resources.
For example, if the difficulty of Bitcoin increases by 15%, then the number of crypto coins will also decrease by 15%. The new ASIC this year brings profit every day of at least 0.002 BTC. The increase in stabilization of military-technical cooperation and system volumes led to the fact that after 4-5 calendar months this equipment began to generate income of only 44%.
Having received the first few bits, a person begins to forget about further possible difficulties and wants to earn more and more. Investors who are not averse to taking risks have also become interested in this topic, and they intend to wait as long as necessary in order to get the desired jackpot.
The monetary losses that may arise due to the increase in bitcoin stabilization are small, since with the increase in the exchange rate the user will receive more virtual resources than he had.
Miners made good money in July of this year, when Bitcoin fluctuated around $2,400, and in December exceeded $10,000. By purchasing BTC, after a few weeks, each person will be able to understand for themselves what the essence of the popular cryptocurrency is and how to make money while lying on their couch.
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Forecast for the near future
The issue of increasing the complexity of Bitcoin, like the issue of changing the exchange rate, does not have an exact solution. These two indicators are closely related to each other, but it is impossible to say exactly what depends on what. Thus, some users are convinced that exchange rate fluctuations affect the adjustment of difficulty and, as a result, the profitability of mining. Others fear sharp drops in cryptocurrency exchange rates due to the stabilization of system indicators.
Due to the constant increase in the complexity of Bitcoin, over time, mining even on the most powerful equipment becomes unprofitable. Then miners are left with two solutions: continue to invest money in increasing capacity or switch to mining another less complex cryptocurrency.
Mining of Bitcoin blocks, taking into account a time interval of 10 minutes, is scheduled until 2140. It is unknown what mining equipment will be like by then and how profitable the process will be.
Algorithm for changing the difficulty of Bitcoin
Difficulty changes in the Bitcoin network occur every 2016 blocks. In an ideal world, with a constant network hashrate, 2016 blocks should be found in 2 weeks. This is where the Bitcoin block time is set - 10 minutes. Let's do a simple calculation and check if this is actually true.
2016 (blocks) x 10 (minutes per block) / 60 / 24 = 14 days
In reality, the hashrate usually changes. If there are more miners, the hashrate increases, 2016 blocks are found faster than in 14 days. As a result, the complexity of the network will increase.
Source: extremetech
At the end of 2022, miners began to turn off their equipment, and the hashrate gradually decreased. Along with it, the difficulty also decreased, because each time 2016 blocks were found not in 14 days, but in a longer time.
Pay attention to the Bitcoin difficulty chart. The difficulty changes dramatically every 2016 blocks.
Bitcoin network complexity. Source: Blockchain.com
For one change, the complexity can increase or decrease by 4 times, no more.
Mining Features
Mining of Ethereum and Ethereum Classic is carried out according to an algorithm that differs from that for Bitcoin, although the principle of the process remains unchanged. However, the presence of specialized equipment makes BTC mining using video cards irrelevant, and organizing an ASIC farm requires significant investments.
A large number of miners were attracted to the Ethereum ecosystem in early 2016, when the price of ETH began to increase significantly, reaching peaks of up to 9000% of its minimum value. Until this time, there was only a slight increase in difficulty, since cryptocurrency could only be mined in solo mode on a Geth wallet, which was a difficult task for an unprepared user. This alienated many miners, despite the profitability of the coin, which even then brought a good percentage of profit.
Today, Ethereum mining is still a worthwhile endeavor, as the market value of ETH and the cryptocurrency's capitalization rates are extremely high. Experts' assumptions that the price of coins may rise further, despite its inflationary nature, are increasing the excitement.
At the same time, mining requires significant hardware capacity: the set of parameters of a correctly selected video card must provide sufficient performance for calculating blocks.
The hashrate (hashrate, the number of calculated hashes per unit of time) of a video card is determined by its specific model.
The hashrate is also influenced by many additional factors: features of the operating system, type of device (farm or work computer). Special services allow you to calculate how profitable it will be to mine cryptocurrency, taking into account all the circumstances:
- WhatToMine;
- Nicehash.
Warning! The complexity of the Ethereum network will inevitably increase, and after its transition from the PoW to PoS algorithm, mining will cease to matter for the security and performance of the platform. At the moment, it is not recommended to start mining ether from scratch, since the network is planned to transition to PoS. Instead of purchasing hardware, cloud-based coin mining solutions are a possible alternative.
Methods for changing complexity as the network develops
Indicators increase or decrease in one of the following ways:
- After a specified number of blocks. In Bitcoin, these are the previously mentioned 2016 blocks. Each subsequent value is selected by the system so that the hash search time remains constant. Recalculation must be done individually for each user or pool. The overall graph only takes into account the average mining difficulty range.
- Using network power in hashrates. An increase in this value indicates that new users are connected to the system and the complexity should be increased. If hashrates fall, the time to search for a block has increased and the complexity is less. This method, unlike taking into account the number of blocks, is not as fair to small farms. If significant power comes into the system, then the complexity increases for everyone at once.
Interesting! Increased mining difficulty is not typical for all cryptocurrencies. For example, on Ripple, where all tokens are obtained at the chain creation stage, the term has no meaning and no graphs are drawn up.
Network complexity: does it make sense to mine a coin now?
The growing complexity of cryptocurrencies is forcing many miners to stop mining them. Before buying equipment, calculate its payback in advance, especially for ASICs. It is better to mine simple cryptocurrencies: it is both simpler and more profitable, you can use video cards. Use special services to independently select cryptocurrency for mining on your equipment. Or systems like Nicehash so that they decide for you which coin is best to mine at the moment on your video card.
Difficulty in mining: what is it?
The increasing complexity of mining bitcoins and other cryptocoins is the basis of blockchain technology. You can verify this by opening the mining difficulty chart for any altcoin.
The difficulty of mining has a decisive influence on the profitability of cryptocurrency mining. Some experts argue that the growing difficulty will soon make mining unprofitable as such.
Mining concept
Mining is the process of calculating cryptographic keys for signing blocks in the blockchain. To protect transaction records stored in a public ledger, they are compiled into blocks, each of which has its own unique crypto-signature.
It is formed from the previous hash, data about transactions carried out in the current block and a random number.
Cryptocurrency rate: BTC. ETH. LTC. XMR. DASH - Real Time
The calculation algorithm requires a lot of computing power to calculate hashes. This is done by the computers of miners, who receive a reward for this by issuing new coins.
One of the features of cryptocurrencies is their deflationary nature. This means that the total number of mined coins cannot exceed the number specified by the program code.
A feature of the SHA-256 algorithm that underlies Bitcoin is its deflationary model. This means that the volume of coins issued is limited. For Bitcoin, this is 21 million coins, and the last coin should appear in 2040. For BTC forks, this indicator is different, but the method for achieving it is the same: reducing the emission and, accordingly, the reward per block.
Miners can be compared to accountants who constantly work to keep their books up to date by recording all transfers. But any work must be paid. Miners receive a reward from the system in the form of coins of the mined currency.
The miner’s task is to maintain the proper operation of the system. To do this, they carry out competent translations and maintain agreement on one state of the system. For this, each miner receives bitcoin - an electronic currency that is easily convertible into real money.
Bitcoins are unsecured electronic money stored in special wallets. The owner of which can both replenish it and withdraw his funds. They do not have a single center, which ensures safe distribution.
The complexities of the Bitcoin network arise in addition due to the complex system of their operation. All transfers made on the wallet are recorded in a single history; it is divided into chains, which are subsequently transferred to miners.
Their job consists of selecting millions of combinations to select 1 hash that will match all new translations and the secret key.
The miner's reward will be equal to 12.5 bitcoins at a time (from 2016 to 2020). Most often, you have to “fight” for a reward: each miner tries to guess the hash as quickly as possible. After it is detected, the block with all translations is closed. The process resembles a cycle, because then the block changes and the work begins again.
Despite the number of miners, only 12.5 BTC are mined every 10 minutes. These coins are distributed among miners according to the computing power expended. The reward for a signed block does not increase (and is even reduced by half every 4 years).
And if the number of miners increases, then the income of each individual miner decreases proportionally. With the arrival of more and more new crypto miners, competition for limited rewards is growing.
The labor intensity of mining other coins also increases. Ethereum, whose total supply is unlimited, is also becoming increasingly difficult to mine. This is due to the annual limit on the appearance of new coins in the amount of 18 million.
Increasing the complexity (difficulty) of mining allows you to deter users, preventing them from receiving coins in unlimited quantities.
Mining algorithms
As a result of mining, 2 main tasks are solved:
- A Bitcoin network node (node) is determined, which temporarily receives the right to write the next block to the blockchain. This achieves consensus in a peer-to-peer network.
- An emission (additional release) of bitcoin coins is made, which are received as a reward (incentive) by the miner who recorded a new block.
The first problem is solved using an algorithm called Proof-of-Work (PoW) - proof of work done.
PoW (Proof-of-Work) is proof of work performed, an algorithm by which the Bitcoin mining network reaches consensus, determining which of the mining nodes will write the generated block to the blockchain.
The essence of PoW comes down to two main points:
- The need to perform a certain rather complex and time-consuming computational task. In the Bitcoin network, this is the selection of a hash code that meets specified criteria.
- Possibility to quickly and easily check the result.
PoW is used in the protocols of Bitcoin, Ethereum and many other cryptocurrencies.
PoS (Proof-of-Stake) - confirmation of ownership share, is an alternative PoW algorithm for achieving consensus when writing a block to the blockchain, in which the probability of writing a new block to the blockchain and receiving the corresponding reward is proportional to the user’s share of ownership in the system:
An individual currency holder with a share P of the total number of coins in circulation creates a new block with probability P.
PoS is used in the DASH cryptocurrency protocol.
Bitcoins per Block or Block Reward (bitcoins per block) is a reward paid to a miner for successfully solving a cryptographic problem and joining a block to the blockchain.
During the mining process, a cryptographic problem is solved by selecting a certain Nonce parameter, which, being written in the block header, leads to the fact that the resulting block hash code (Block Hash) satisfies a given condition, namely, is less than or equal to the Target number, which is written in bits format.
In turn, the Target number is related to the mining difficulty (Bitcoin Difficulty or simply Difficulty), which is recalculated every 2,016 blocks (about 2 weeks) and depends on the total mining time of these blocks - the faster the mining occurs (due to an increase in computing power) , the higher the difficulty (Difficulty) is set and the lower the Target number.
Tools for work
The difficulty of mining cryptocurrencies is increasing, forcing miners to upgrade their tools for the job. The first steps in this area were carried out using an ordinary computer.
Any person who owns this device at the level of a simple user could earn a fortune with bitcoin. As complexity grew, miners' tools improved: the latest video cards were purchased for fast work, which increased profits several times.
The growth did not stop, only gaining momentum, soon turning into a business. At this time, special devices begin to be used for mining. Even powerful video cards could not withstand such a load, so we had to switch to specialized chips.
They cost much more than video cards, but the advantages justified the cost: they required less energy to operate, the heating was negligible, and the performance was as high as possible.
This leads to a natural division into two categories: those who wanted and had the resources to contribute to the business, others who were willing but could not upgrade their equipment. Thanks to its resources, the first category begins to use ASICs.
Due to the lack of opportunities, the latter have to unite and work together to achieve significant results.
This leads to additional business based on mining: equipment manufacturers, centers that successfully offer their equipment for rent, tried to make money on service.
Why is complexity needed?
To clearly demonstrate this situation, a calculated parameter of the cryptocurrency network “mining difficulty” has been introduced. Mining difficulty is a metric that reflects how difficult it is to solve the mathematical problem to sign a block and receive a reward for it. The difficulty is automatically recalculated after a certain period of time. It is different for each cryptocurrency.
For example, the difficulty of Bitcoin mining is recalculated every 2016 blocks, the mining of which takes approximately 2 weeks. According to the program code, the difficulty is adjusted so that searching for the next block takes approximately 10 minutes, regardless of the number of miners and the total hashrate.
The difficulty is automatically increased if the search for the last 2016 blocks took less than two weeks. This suggests that the total computing power of mining devices has increased. Conversely, a signal to reduce complexity will be a slowdown in the search for 2016 blocks, since the hashrate of all devices has decreased. The result is tight control over the rate at which new coins are issued.
The difficulty of mining a cryptocurrency is measured in hashes per second (H/s). This characteristic demonstrates how difficult it is to make new mathematical calculations to calculate block signatures and receive rewards.
Mining difficulty is a dynamic indicator that is periodically recalculated. As the computing power of mining equipment increases, so does the complexity.
Why is it constantly growing
Bitcoin developers determined that block closure and reward emission should occur every 10 minutes. And this indicator should remain unchanged, regardless of the number of miners involved in calculating hashes and the performance of their equipment. As computing power increases, the difficulty of mining cryptocurrencies increases.
As a result, as the number of farmers and the power of farms increases, the requirements for iron increase. And this applies to each of the cryptocurrencies.
An increase in mining difficulty occurs after the mining speed begins to exceed the planned one. If the miners fail, the task of selecting hashes is simplified, which allows the network to maintain the speed of transactions.
The degree of increase in requirements depends on the ratio of real and planned time for mining cryptocoins. If the actual speed exceeds the planned speed by 5%, then the calculations become more complicated by 5%.
A cryptocurrency with low complexity begins to change this indicator immediately after its popularity begins to grow. A larger number of farms will speed up production, which will lead to an increase in the complexity of calculations. As a result, emissions are kept within predetermined limits.
What affects the difficulty of coin mining?
Network complexity is influenced by two main factors:
- network hashrate - the total productivity of mining equipment engaged in coin mining;
- time spent calculating hashes of the previous group of 2016 blocks.
These parameters are closely interrelated.
An increase in hashrate signals that new participants are joining the network or the speed of their equipment is increasing. Accordingly, finding block signatures takes less time than during the period when performance was lower.
From this we can derive two rules:
- a large number of miners and high hash rates speed up mining and make calculations difficult;
- low hashrate and little interest among miners slow down the search for hashes for block signatures, which determines a reduction in the complexity of calculations at the next stage.
The algorithm uses complex formulas that determine the required level of computing power expenditure during mining. But the simplified mathematical justification looks simple and is based on calculating the block opening time:
t=D/H, where:
- t — block hash calculation time;
- D — established mining difficulty,
- H is the overall hashrate of the network.
The basic value of the indicator is 1. Thus, with a planned block closing time of 10 seconds, it can be achieved with a hashrate of 0.1 H/s.
If new users join the mining, increasing the hashrate by 1 kH/s, then in order to maintain the block closing speed, the difficulty will have to be increased to 10000. In this case, the time will be the same (10000/1000=)10 seconds.
The connection between the complexity of calculations and hashrate is justified mathematically. The algorithm brings it to a value at which the speed of closing blocks will remain at the nominal level. Network hashrate is the main thing that determines difficulty.
The growth of the network hashrate means that new participants have joined the mining industry and competition has increased. As the number of miners increases, the time spent searching for the next block decreases. After block 2016, the mining difficulty is recalculated. The change in the indicator is described by the following pattern:
As a result, the complexity of calculations is a dynamic value that fluctuates along with changes in the total power (hash rate) of miners’ equipment. As the hashrate increases, the difficulty increases. and vice versa. The more popular the coin, the more miners get involved, raising the overall hashrate.
What does complexity affect?
So we figured out what mining difficulty is and what factors influence it. Now it’s worth finding out what changes in this indicator affect.
First of all, it affects the farmer's income. While the hardware hashrate remains the same when running a particular algorithm, the difficulty changes, decreasing or increasing the amount of reward received. If it grows by 20%, income from participation in hash searches will drop by the same amount.
In accordance with the change in difficulty, the payment to the miner changes. For each closed block, the reward changes, which can be very unstable. From 2008 to 2012, the fee was 50 bitcoins per mined block, after a minimum period of time it decreased by 2 times - to 25 btc. In 2016, the reward was halved again and became 12.5 btc. The next reduction will be in 2022.
For example, the ASIC for bitcoin mining antminer s7 in mid-2017 (more precisely, with difficulty as of July 1, 2017) mined 0.06 BTC per month. But the complexity of the Bitcoin network has continuously grown. As of November 1, 2022, the same equipment will already produce 0.026 BTC per month. The miner's income dropped by more than half in just 4 months.
The same thing happens in the opposite situation - a drop in complexity causes an increase in profitability by the same percentage. The only problem is that cryptocoins are becoming more and more popular, so more and more people are starting to mine them. Accordingly, calculations become more complicated and profitability falls.
If we look at the cryptocurrency difficulty graph, we will see few cases where the labor intensity of mining decreased for a long time. Usually it continuously grows, and profitability falls. Moreover, this process is irreversible as long as interest in blockchain-based technologies continues to grow.
It would seem that in such conditions, mining crypto should quickly become unprofitable. However, it is not.
The growing difficulty of mining and the decrease in nominal income in altcoins is compensated by the rapid growth of the cryptocurrency rate.
For example, with a doubling of the labor intensity of Bitcoin mining, which was recorded last fall, its rate relative to fiat money increased more than 3 times. As a result, despite the smaller number of mined coins, the real profits of miners increased.
In our example, on July 1, the Bitcoin rate was $2,400, and on November 1, the quotes rose to almost $6,700. It turns out that the income of fiat miners has increased even despite the rapid increase in the complexity of mining.
Moreover, the growing popularity of a coin automatically leads to an increase in market demand for it. There are more people wanting to buy it, and the price is rising.
This is the logic of the creators of cryptocurrencies with dynamic complexity. And although there is no direct relationship between the price of a currency and how difficult it is to mine, there is still an indirect relationship. It is assumed that the increase in complexity means an increase in the popularity of cryptocurrency among the general population.
Someone who learns about decentralized currencies will try to mine. This will lead to increased complexity. But at the same time, demand is highly likely to increase, and, therefore, the exchange rate. It turns out that growing interest in society stimulates both the growth of the exchange rate and the increase in the complexity of mining.
In this case, popularity increases the difficulty of production and the exchange rate for fiat money at the same time. And the direction of change in the profitability of crypto mining depends on which factor prevails.
Bitcoin goes green
When the majority of miners were located in China, BTC was considered “dirty.” Basically, energy from thermal and nuclear power plants was used for production. But after miners left for other countries, more than 50% of the hashrate became environmentally friendly.
Solar panels and wind turbines are growing in popularity to power equipment. For cooling, “farms” are placed in northern regions, which saves energy.
As a result, this allows you to earn more, and large organizations and states begin to perceive cryptocurrency positively. Skeptics predicted that mining would use more energy than all of humanity needs. However, digital assets were able to avoid such a scenario.
How does Bitcoin's sustainability affect cryptocurrency adoption?
The widespread use of “crypto” in the world is inevitable. A number of countries are considering laws to accept and regulate tokens. Although BTC will not immediately become a tool for payments, as an investment it will be legal almost everywhere.
Previously, Bitcoin mining left a huge carbon footprint, and companies refused to accept it for payment. Also, the “whales” did not consider these assets for investment. For example, Tesla has suspended the sale of cars for cryptocurrency.
When the share of clean electricity exceeds 80%, some states will legalize mining. In addition, local companies will begin to accept it to pay for goods and services.
Bitcoin Network Difficulty: What is it?
All information about bitcoin transactions from the moment the system is launched is stored in an open registry - blockchain (block chain). To protect against false entries, data blocks have a digital signature (hash), the calculation of which requires large computing power. This work is occupied by the computers of miners, who receive 12.5 BTC for finding a valid block signature. This amount is issued by the blockchain as a fee for maintaining the operation of the network. The Bitcoin mining algorithm controls the speed of finding hashes so that on average 6 blocks are closed per hour. This is done by adjusting the difficulty of hash calculations.
Bitcoin difficulty, the graph of which is published on the official website and specialized resources, is a set of mathematical calculations necessary to calculate hashes. The higher this indicator, the more powerful equipment is required to close the block in a timely manner.
The BTC production (emission) rate is adjusted automatically. After closing 2016 blocks, the average time to find one hash is analyzed. If it exceeds 10 minutes, the complexity of calculations decreases, otherwise it increases. Thanks to this approach, bitcoin is issued in strict accordance with the schedule laid down by Satoshi Nakamoto, who developed the concept of cryptocurrency. Regardless of the performance and the amount of equipment involved, exactly 6 transaction blocks are closed every hour. As a result, there is no uncontrolled emission and drop in the value of coins.
The concept of a “complexity bomb” and whether it will work in 2021
Ethereum Difficulty Bomb
At the time when the creators of Ethereum were working on the concept of their blockchain project, it was assumed that it would initially work on the Proof-of-Stake (PoS) hashing algorithm. But due to the complexity of implementing this technology at that time, it was decided to launch Ethereum based on a more familiar mining model - Proof-of-Work (PoW, proof of work).
At the same time, the developers prudently introduced a “difficulty bomb” into Ethereum - a mechanism for gradually increasing the difficulty of mining new blocks, which in the future would help transfer the network to PoS.
Initially, it was assumed that the explosion of the “bomb” should have occurred at the moment when Ethereum was ready to work on the new algorithm, and provoke the so-called “ice age” - a transitional stage during which it would be very difficult to mine new coins “in the old way.” difficult and extremely unprofitable. In theory, this should have convinced miners of the need to switch to a new chain, instead of maintaining the life of the old one, which, although it will be non-canonical, could well develop as a separate project (for example, like Ethereum Classic).
However, due to the delay in the development of the PoS mechanism, plans for its implementation are constantly being postponed to the future. At the same time, the “complexity bomb” has already tried to “explode” several times and had to be moved in time by carrying out hard forks, so as not to prematurely scare away the miners who maintain the stability of the Ethereum network.
According to the latest statements from the developers, in July 2022, the Ethereum 1.0 network (running on PoW) should merge with Ethereum 2.0 (running on PoS). If this does not happen, the “complexity bomb” will explode. But there is unofficial information that the developers will once again carry out a hard fork in order to push back the expiration date of the “difficulty bomb”, as they have already done many times.
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Read the full article: Ethereum difficulty bomb and the impact of technology on the life of the coin
You can learn more about the difficulty bomb by watching our video:
Ethereum Difficulty Bomb
How the difficulty changed
Watching the Bitcoin hashrate graphs, you can see how much the difficulty of mining is growing. The complexity of bitcoin mining today is determined by the total hashrate, which exceeds 34 exahash per second. At the time the system was launched by its creator, Satoshi Nakamoto, the hashrate was equal to 1 hash per second. In the first two years of its existence, Bitcoin managed to go beyond the crypto community. The increase in the number of miners raised the figure to 14 kilohash/s. In January 2012, the network speed increased a million times compared to its founding and amounted to 1 Mx/s. Until September 2013, the difficulty of mining increased another hundredfold, after which an avalanche-like growth in interest in cryptocurrencies began. In January 2014, the speed reached 1.4 GHz/s and continued to grow. Interestingly, even the fall in the Bitcoin price did not have much effect on the increase in difficulty. Until October, network performance exceeded 61 exahash, after which a period of decline began to the current value. The reason for the fall lies in the ongoing depreciation of the value of Bitcoin. Many miners were forced to leave the business due to losses.
What it is
In simple terms, mining difficulty is a numerical value that reflects the computing hardware required to find a single correct hash. The parameter is not fixed and is recalculated after a certain number of blocks.
With the advent of new equipment with a high hashrate, the difficulty of mining virtual coins also increases. Consequently, the requirements for mining equipment are rising. It turns out to be a kind of technology race.
Complexity analysis is a mandatory job for a miner, because the costs of purchasing equipment and the profitability of the process directly depend on this information. We will dwell on this further below.
Bitcoin difficulty chart 2019-2020
What is the current difficulty of Bitcoin
The difficulty of mining Bitcoin on average is constantly increasing. This happens due to the connection of new equipment to the network and an increase in the overall hashrate. You can see how the complexity of the Bitcoin network has grown every year below:
| DATE | COMPLEXITY | NETWORK HASH RATE |
| 27.01.2009 | 1 | 6.32 MHash/s |
| 04.02.2010 | 2 | 12.96 MHash/s |
| 08.09.2010 | 713 | 5.10 GHash/s |
| 21.12.2010 | 14484 | 103.68 GHash/s |
| 09.05.2011 | 157416 | 1.13 THash/s |
| 26.12.2011 | 1159929 | 8.3 THash/s |
| 30.07.2012 | 2036671 | 14.55 TH/s |
| 26.12.2012 | 2979636 | 21.33 TH/s |
| 29.06.2013 | 21335329 | 152.64 TH/s |
| 21.12.2013 | 1180923195 | 8.44 PH/s |
| 29.06.2014 | 16818461371 | 120.39 PH/s |
| 30.12.2014 | 40640955016 | 290.87 PH/s |
| 28.06.2015 | 49402014931 | 353.41 PH/s |
| 31.12.2015 | 103880340815 | 742.83 PH/s |
| 21.06.2016 | 209453158595 | 1.50 EH/s |
| 28.12.2016 | 317688400354 | 2.27 EH/s |
| 18.06.2017 | 711697198173 | 5.09 EH/s |
| 18.12.2017 | 1873105475221 | 13.40 EH/s |
| 19.06.2018 | 5077499034879 | 36.34 EH/s |
| 31.12.2018 | 5618595848853 | 40.16 EH/s |
| 27.06.2019 | 7934713219630 | 56.77 EH/s |
| 19.12.2019 | 12948593420946 | 92.66 EH/s |
| 04.06.2020 | 13732352106018 | 98.30 EH/s |
| 17.10.2020 | 19997335994446 | 142.94 EH/s |
As you can see, the difficulty of mining has increased almost exponentially since the advent of Bitcoin. In the first year of the appearance of cryptocurrency, this indicator was one, then several units, then several hundred, thousand, etc. The complexity of Bitcoin today is in the trillions, and the total hashrate has reached 142.9 EH/s.
Where is the network hashrate published?
You can find out what the current mining difficulty is online on the official bitcoin website and other resources dedicated to cryptocurrencies (bitinfocharts.com, whattomine.com and others).
Please note that this value is constantly changing. Therefore, the published table or graph does not allow one to accurately navigate the situation. It is necessary to consider the dynamics, focusing on data from several authoritative sites.
