On-chain data shows the Bitcoin Difficulty has seen a sharp increase in the latest network adjustment. Here’s what this means for the blockchain.
The metric is controlled entirely by the code that Satoshi wrote in and automatically changes its value about every two weeks, according to network conditions at the time.
The pseudonymous creator of the cryptocurrency had one goal in mind when creating the Difficulty: the network must not deviate from a standard block time of 10 minutes per block.
Whenever the miners are faster than this rate (that is, they mine a block in fewer than 10 minutes on average), the network reacts by raising the metric, in order to slow the validators back down to the intended speed. Similarly, the blockchain reduces the Difficulty if miners are unable to hit the target time.
The latest network adjustment occurred this past weekend. Here’s a chart that shows how the Difficulty changed during it:
Prior to the adjustment, the Bitcoin Difficulty stood at 116.9 terahashes, but now, it has jumped to 126.2 terahashes. This reflects a very notable rise of almost 8%.
Now that things are difficult for the miners again, though, it remains to be seen how long these upgrades would stick around. Miners that are just breaking-even can get pushed underwater by spikes in Difficulty and they usually respond by disconnecting their machines, causing a drop in the Hashrate.
As is visible in the graph, the Bitcoin miner-associated wallets have offloaded around 70,000 BTC (worth almost $8.4 billion) since Thursday.
At the time of writing, Bitcoin is floating around $119,800, up nearly 11% in the last seven days.
