Bitcoin Mining Difficulty Hits Record High as Miners Ramp Up Power

Bitcoin’s mining difficulty surged 6.2% on Tuesday, surpassing the 100 trillion mark for the first time. This landmark adjustment, recorded at block height 868,896, brought the difficulty level to 101.7 trillion, as reported by Mempool. This new peak comes just two weeks after setting the previous record of 95.7 trillion, underscoring the rapid escalation in mining intensity.

Mining difficulty is a dynamic, relative measure that indicates how challenging it is to mine new Bitcoin blocks. Every 2016 blocks—or roughly every two weeks—the difficulty adjusts to maintain an average interval of 10 minutes per block, balancing for fluctuations in mining activity. Recently, however, blocks were mined at a faster rate of around one block every nine minutes and 27 seconds.

The higher difficulty highlights the increasing computational power required by miners to secure the network. As more miners join, difficulty rises to maintain balance; if miner numbers drop, the protocol eases the difficulty. In the past week, the network’s hash rate—a measure of collective computational power—hit a record high, averaging 755.5 exahashes per second (EH/s), surpassing the 750 EH/s level for the first time. This increase in power has pushed less efficient miners out of the market, particularly following Bitcoin’s April 2024 halving, which cut block rewards from 6.25 BTC to 3.125 BTC. Earnings from mining dropped significantly after the halving, with average daily revenue now fluctuating between $25 million and $35 million, down from a $72.4 million peak.

For miners with high electricity costs and lower-efficiency hardware, the increased difficulty has led to negative profitability. The hash price—a measure of the expected earnings per terahash per second (TH/s) per day—hit all-time lows of $0.04 in September, but has since edged up slightly to $0.045. Meanwhile, resilient miners, particularly U.S.-based public companies, have continued to ramp up capacity, with major manufacturers like Bitmain, MicroBT, and Canaan introducing new, more efficient rigs.

The strategies among public Bitcoin mining companies have diverged significantly this year. AI diversifiers such as Core Scientific, Iris Energy, and Terawulf have seen stock gains, outperforming traditional mining companies like CleanSpark, Riot, and Marathon Digital Holdings.

Vera, an industry analyst, suggests that Bitcoin miners are increasingly exploring alternative energy sources, including off-grid and low-uptime power opportunities, as traditional data centers monopolize large on-grid sites.