On August 28, Bitcoin’s mining difficulty jumped by 2.99%, reaching a formidable 89.47 trillion at block height 858,816. This adjustment introduces additional hurdles for miners, who are already grappling with declining revenue from their operations.
Bitcoin’s mining difficulty operates like an automatic thermostat, ensuring that blocks are mined at a consistent pace despite fluctuations in mining power. If miners increase their hashpower, blocks are mined faster, prompting a difficulty rise. Conversely, if hashpower drops and blocks are mined more slowly, the difficulty decreases. Currently, the difficulty of 89.47 trillion is close to the all-time high of 90.66 trillion set at the end of July. This increase means mining blocks is now 2.99% tougher for the next 2,016 blocks.
Miners are already facing significant challenges due to a slump in revenue. The hashprice, which represents the estimated daily earnings for 1 petahash per second (PH/s), has recently dipped below $50 per PH/s. As of the most recent data, the hashprice hovers just above $42 per day, down from $47 per PH/s. This decline in hashprice is squeezing profits and impacting even the largest publicly traded mining companies.
The shrinking revenue is contributing to the centralization of Bitcoin mining pools. Currently, the mining landscape is dominated by a few major players. Foundry USA leads with 28.6% of the network’s total hashrate over the past three days, followed by Antpool with 25.86%. Viabtc and F2pool also hold significant portions of the hashrate, with 11.44% and 10.98%, respectively. In a 72-hour period, these four pools collectively mined 76.88% of all Bitcoin blocks.
This latest difficulty adjustment and the low hashprice levels are raising concerns among miners. The increasing difficulty coupled with declining earnings could lead to further consolidation in the mining sector. How do you think these changes will affect the mining landscape? Share your thoughts and opinions in the comments below.
