What's in this article
Profit margins for miners are getting low as mining difficulty touches an all-time high of 26.64 trillion. The numbers are likely to increase as the new update is expected in a few days.
As miners are already suffering a huge dump in Bitcoin price, Mining difficulty on the Bitcoin network has increased by 9.32%, and profit margins for miners are getting low day by day.
What is Bitcoin mining difficulty:
Bitcoin mining difficulty is the measure of how much computational power is required to confirm one transaction on the blockchain and to find a new block. It faced a huge dip when in 2021 china started to order banks not to facilitate transactions and a total ban over mining. Mining difficulty has made mining challenging more than ever.
BTC mining difficulty at its peak:
As Bitcoin price is struggling and it is highly volatile, the best rigs in the world are barely making $10 per day and the old ones are even in the worst state, according to the data provided by Bitcoin.com. The difficulty is automatically adjusted after every 2016 blocks have been mined in the Bitcoin network. The higher the hashrate, the higher the difficulty. The difficulty is likely to keep hitting new records in 2022 as well. According to the news, hashrate will keep going up in the upcoming days, which means difficulty will also increase.
So, Bitcoin mining is rewarding as long as the value of mined coins is higher than the equipment expenditures. The difficulty is also an integral part of the process as it determines how much power and equipment are required for mining. Since bitcoin price is on a downward trend, miners would find it more difficult to mine than the last year.