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Making money with bitcoin mining is becoming more and more difficult; Why?


The difficulty of extracting bitcoins has increased for the seventh consecutive period. This successive increase in network stiffness has been unprecedented since 2019, and is happening at a time when prices are moving towards newer peaks.

to the Report Bitcoin, the Bitcoin network, was launched in 2009, and during this time, almost every two weeks, its algorithm slightly altered the network’s difficulty to make bitcoin mining easier or more difficult.

The difficulty of the Bitcoin network increased by one percent yesterday. Although this is not a big jump, it is the seventh consecutive increase since the end of July. According to Arcane Research, the last time the bitcoin network had experienced such a steady increase dates back to 2019.

The difficulty of bitcoin mining is adjusted to maintain the processing rate of one block every 10 minutes. In blockchains such as bitcoins, which are based on a proof-of-work mechanism, miners compete with each other to validate transactions, and they can also extract new bitcoins generated by creating each block. Miners compete with each other to be the first to solve this cryptographic puzzle. The more processing power a miner has, the faster they can solve this puzzle.

Therefore, it can be imagined that any person who has more processing resources or hash power solves the puzzle faster. Otherwise, instead of bitcoin dripping into the digital currency market, there would be a flood.

Network hardness adjustment solves this problem. The fact that the extraction process continues to be more challenging indicates that more hash power has been provided by miners.

According to Blockchain.com statistics, the hash rate, or the same number of calculations per second, has been higher in October than in June. Bitcoin network hash rate started to decline at that time after reaching its peak in mid-spring.

Also read: Bitcoin mining tutorial + introduction of the best mining devices

Making money with bitcoin mining is becoming more and more difficult;  Why?
Bitcoin network hash chart in the past year

The bitcoin network hash rate has correlated well with the price of bitcoin over the past six months. About a month after the price peaked at $ 64,804.72, the Bitcoin network hash peaked. When the price of bitcoin fell, the hash rate behaved similarly.

Arkan Research, while pointing out that miners follow certain payment periods, said:

High mining profitability always requires more hash rate.

With Chinese miners shutting down during the summer, mining has been somewhat lucrative this season. Miners based in the United States and elsewhere benefited from this reduction in competition. The high hash rate on the Bitcoin network is now returning, and the price is going up with it. The high price of bitcoin is what makes miners happy. Arkan Research said the average daily income of miners last week was 25 percent higher than the annual average.

Arkan Research said:

2021 has been a great year for bitcoin miners. These huge profits have just increased and do not seem to be coming to an end anytime soon.

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