BITCOIN MINING DIFFICULTY ADJUSTMENT

New hashrate all-time high makes Bitcoin mining as hard as it’s ever been

Analyzing Bitcoin’s difficulty adjustment and mining profitability

The latest difficulty adjustment, effective at block height 772,128, increased mining difficulty by 10.26%. In this overview, we’ll analyze the effects on mining and profitability.

Bitcoin’s total hashrate

It only took 2023 two mining epochs to bring us a new hashrate all-time high.

In this case, two factors coincided for this happen. First, the end of the winter storm in Texas — one of the largest mining hub on the planet — that forced miners off the network. And second, the Bitcoin rally that brought its price from $16K to $21K, which granted miners increased profitability.

These led to hashrate average 269.02 EH/s at time of the of the adjustment. The highest it has ever been.

Bitcoin’s mining difficulty

As established by the protocol, with higher hashrate comes higher difficulty — the higher it has ever been, in this case.

Indeed, difficulty increased 10.26%, from 34.09T to 37.59T. This was the largest difficulty increase for Bitcoin since October 2022. Mining Bitcoin has never been more competitive than it is today.

Hashprice, or mining revenue per TH/s

Bitcoin’s price rose over the weekend, increasing almost 25% week-on-week.

Naturally, this led to a major spike in mining profitability — one that miners have been expecting for a while now. Hashprice reached $0.078, its highest level since November 2022. However, that was before the adjustment.

As you may know, profitability is mostly determined by difficulty and price action. And while the latter was pushing it put, the former put a stop to its growth after the adjustment.

After the correction, miner revenue per hash per second is now sitting at $0.071, which is still a significant improvement from last epoch.

Bitcoin mining profitability overview

Even after reaching a new difficulty all-time high, Bitcoin did its homework and its price increase managed to support thicker profit margins for miners.

Nevertheless, we know that hashrate tends to follow profitability. And with this increase, it’s more than likely that a new wave of miners will fire up their ASICs and start hashing blocks.

This would lead to difficulty further increasing and, as a result, Bitcoin would have to keep climbing. Otherwise, profitability will fall once again.

The difficulty adjustment in numbers

• Difficulty adjustment block height: 772,128
• Date of the adjustment: 01/15/2023
• Average hashrate at the time of the adjustment: 269.02 EH/s
• Previous difficulty: 34.09T
• Current difficulty: 37.59T
• Difficulty change: +10.26%
• Miner revenue per TH/s (hashprice) after adjustment: $0.071