Bitcoin mining difficulty reached a new all-time high of 92.67 trillion on Sept. 11, marking a 3.6% increase. This surge comes at a time when miner profitability is on the decline, adding pressure to firms that have been struggling since the halving event in April.
Bitcoin’s mining difficulty adjusts every two weeks after 2,016 blocks are completed in order to maintain stable block discovery times. As the difficulty rises, miners require more computational power to mine each block. This increase suggests more miners are joining the network, resulting in a higher overall workload. Additionally, a higher difficulty level enhances the security of the blockchain by increasing the energy needed to launch network attacks.
In tandem with the rise in difficulty, Bitcoin’s hash rate has been steadily climbing, averaging 693 exahashes per second based on a seven-day moving average. The hash rate measures the computational power of miners in processing transactions and mining BTC. It indicates the number of calculations mining equipment performs per second to solve the mathematical problems necessary for validating transactions and adding new blocks to the blockchain.
Despite the increase in hash rate, Bitcoin’s hashprice, which measures miner revenue, has dropped to a record low of less than $40 per petahash, according to data from Hashrate Index. This decline in hashprice has been attributed to the difficulty adjustment, pushing it to historic lows.
The ongoing decline in hashprice could spell trouble for many mining operations, particularly those that have been operating at a loss since the halving event in April. Some miners have diversified their operations by providing services for AI companies. Luxor Technology pointed out that Fractal Bitcoin, a scaling solution native to Bitcoin, could potentially offer miners an additional $1.41 in revenue per PH/s/day.
Luxor Technology explained that the coinbase reward on Fractal is 25 coins for each block, with the market pricing in approximately $15 for each FB coin. This translates to a total dollar value of $360,000 available for Bitcoin miners per day.
As miners navigate the challenges brought on by the fluctuating mining difficulty and hashprice, they continue to explore innovative solutions to optimize their operations and maximize their revenue potential.