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Bitcoin mining difficulty adjustment

Bitcoin mining difficulty jumps back, reaching a new all-time high

The latest adjustment effective at block height 729,792 increased mining difficulty by 4.13%. In this overview, we’ll analyze the effects on mining and profitability.

Bitcoin’s difficulty adjustment in numbers

The latest difficulty adjustment occurred at block height 729,792, mined on March 31. The hashrate at the time of the adjustment averaged 204.58 EH/s.

Hashrate was 4.13% higher than the 196.45 EH/s from the last change.

Bitcoin mining difficulty (Source: Coin Metrics).

As a result, difficulty rose 4.13% from 27.45T to 28.59T. This marks a new all-time high for Bitcoin mining difficulty. In other words, Bitcoin has never been more secure.

The adjustment comes as a sign of hashrate recovery after two consecutive drops. It also serves to maintain a streak of increasing difficulty.

Indeed, with this change on the last day of March, Bitcoin has now chained eight consecutive months of growing difficulty. The last time a month ended with a lower difficulty than its predecessor was July 2021, marked by the now seemingly irrelevant Chinese crackdown on mining.

Bitcoin hashrate (Source: Coin Metrics).

Difficulty adjustment effects on Bitcoin mining profitability

The hashrate growth leading to the difficulty increase came as no surprise, as bitcoin finally managed to break through the range it had been swinging through since late February. Indeed, bitcoin managed to touch $48,000 in the last days of March.

That said, miners will be pleased to know that the price action balanced the hashrate growth. As a result, the difficulty increase wasn’t too harmful to profitability.

Bitcoin mining revenue per TH/s, also known as hashprice (Source: Coin Metrics).

Hashprice — which had reached $0.22 after bitcoin’s surge to $48,000 — dropped two cents to $0.20, allowing miner revenue to remain at mid-February levels. Total miner revenue is now sitting at $40M per day.

Total mining revenue per day (Source: Coin Metrics).

Implications of the latest difficulty adjustment

The latest difficulty adjustment is positive on two levels.

Firstly, it sets a new all-time high for mining difficulty, showing yet again how resilient and secure the Bitcoin network is.

Secondly, price action counterbalanced the negative impact difficulty increases have on mining profitability. As a result, miners are enjoying a slight improvement in short-term revenue.

Nevertheless, we seem to have reached a balance point between hashrate and profitability. That means that price action will be crucial to see whether the hashrate continues to grow beyond the current all-time high.

Adverse price action will directly impact mining profitability and likely force miners with lower profit margins to disconnect from the network, driving hashrate down.

On the other hand, positive price action will allow increased profitability, attracting new miners to start hashing.

TL;DR:

  • Difficulty adjustment block height: 729,792
  • Date of the adjustment: 03/31/2022
  • Average hashrate at the time of the adjustment: 204.58 EH/s (ATH)
  • Previous difficulty: 27.45T
  • Current difficulty: 28.59T
  • Difficulty change: +4.13%
  • Miner revenue per hash per second (hashprice) after adjustment: $0.20

About Titan

Titan provides powerful services for crypto mining at scale, including the first enterprise-grade mining pool. Titan is also the builder of the Lumerin Protocol, a peer-to-peer, open-source solution that makes crypto mining hashpower a tradable, liquid financial asset, unlocking mining profitability and providing greater access to capital.

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Titan Mining

Titan Mining

We deliver software and services for crypto mining at scale. A Bloq Inc. company. Building @lumerinprotocol. Visit us on https://titan.io.