Bitcoin mining difficulty, which is the measure of how difficult it is to solve the different mathematical problems associated with a block surpassed 80 trillion on February 16th, for the first time in history. According to the recent data published by BTC.com which is one of the most popular blockchain research platforms, the high rate which denotes the computational power decided by the miners has seen a steep increase to 562.891 EH/s, along with the mining difficulty reaching the highest value ever recorded, at 81.73 trillion.
The Impact of Halving on Difficulty, Rewards, and Hash Rate Dynamics
The difficulties associated with Bitcoin mining have seen a steady and gradual increase right from January 2023 and there were different predictions and calculations which stated the value would reach 100 trillion in the coming months. The difficulty associated with the mining of Bitcoin which is said to be a result of its proof-of-consensus mechanism helps to understand and calculate the different issues and complexities of adding a new block to the existing blockchain. As it’s easily understandable, with the increase in difficulty, the computational power and the energy needed by a miner to find the correct hash for the new block also increases. The different records and details from the last 12 months denote that the difficulty level for the Bitcoin network has gone past beyond double its value.
The coming months are crucial for Bitcoin as its rewards will be cut in half by the end of April in an event which is known as Bitcoin Halving. It is an event where the reward for mining Bitcoin transactions is reduced in half. It reduces the rate at which new coins are created and thereby reduces the availability of new supply too. This measure is mainly implied or as a way to combat issues associated with inflation and it is incorporated by the programmers of the coin every four years. The last halving was done in 2020, in May.
As mentioned, having reduced the Bitcoin rewards and with the latest having, the rewards are said to see a drop to 3.125 Bitcoins from the current value of 6.25. As a result of the halving, insufficient miners are expected to face struggles to break even and thereby, exit the mining rewards which will gradually help to mark a reduction in the hash rates as the hash rate a reduction, it is also said to decrease the difficulties in Bitcoin mining too.
The halving is said to be implemented by the end of April, which is just days away, and people, mainly the investors, seem to be quite hopeful about the price of Bitcoin. Currently, the coin is trading at a value of $52,097.
According to some of the sources online, the current hash rate of Bitcoin is expected to have 20% go offline after the halving which is expected to take place in April. Only the efficient miners are expected to survive the halving which explains this large number. As per the reports from a reputed source, miners who use the new SD19 models may not be able to continue with their profitability.
Also Read: How Does Bitcoin Mining Work? Unlocking The Mystery!!
Bitcoin halving has occurred a total of three times since 2009 and the first halving took place on November 28, 2012. During the first halving, the block reward was reduced from 50 Bitcoins to 20 Bitcoins. The biggest takeaway after the first halving was that there was a noticeable increase in the value of Bitcoin’s price and the data from all the different halving shows that it has been the same for the other halving too. The second halving took place on July 19, 2016, and the same pattern of increase in the value of the coin was seen the following year too. The most recent halving took place in 2020 and it reduced the rewards to 6.25 Bitcoins. Following each halving, a considerable increase in the price and increased media attention has been reported, which is expected to take place after the upcoming halving in April.
The exact date of the next halving is not available as of now but is expected to take place on April 20, 2024, and will see a reduction in block rewards from 6.25 to 3.125. Following the patterns of Bitcoin halving, the next one is expected to take place in 2028.
