Bitcoin mining difficulty rises by 1.74% after three consecutive falls

Bitcoin’s mining difficulty has jumped by 1.74% after falling for three consecutive time periods.

The change is reflected in data published Thursday by BTC.com, which tracks network mining difficulty and posts an update as adjustments take place roughly every two weeks.

Zack Voell, an analyst at mining firm Braiins, said that it isn’t unusual to see a slight uptick like this after more significant drops. “Difficulty is still significantly lower than a few months ago, and lots of hash rate has been pushed offline from declining profitability, summer temperatures, and some lingering site construction delays,” he told The Block in a message.

Heat waves across major mining regions such as Texas and Georgia, in the US, and Sichuan, in China, have had a major impact on the recent decrease in hash rate and difficulty, according to Kevin Zhang, senior vice president of mining strategy at Foundry, which runs the Foundry USA mining pool.

“The rising temperatures have only exacerbated the volatility on energy pricing in an already stressed global market,” Zhang said.

Just this week, bitcoin miner Riot said that the amount of time it powered down its operations due to extreme heat in Texas in July led to an estimated 21% cut in bitcoin mined.

“We could see more small positive adjustments through the rest of the summer as some miners around the world deploy more machines. But large increases in hash rate and difficulty are unlikely until the market significantly recovers,” Voell said.

The network’s hash rate has also gone up by almost 5% since July 21, the date of the last update, according to data compiled by The Block Research.

Mining difficulty refers to the complexity of the mathematical process behind mining, during which miners are repeatedly trying to find a hash below a set level. Miners that “discover” this hash win the reward for the next transaction block. 

Mining difficulty adjusts every 2,016 blocks (roughly every two weeks) in sync with the network’s hash rate.

This piece has been updated with statements from Kevin Zhang

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