Bitcoin Mining Likely to See 4th Difficulty Increase this Month Despite Downswing
Bitcoin mining is on the way to seeing a fourth consecutive difficulty increase this month. A new increase could take BTC mining difficulty to 30.28 trillion in what could be the biggest difficulty jump this year, according to consultancy firm BlocksBridge.
Bitcoin Mining Difficulty Headed for 30 Trillion
The competition between Bitcoin miners intensifies at a rapid pace as Bitcoin mining difficulty heads for a fourth straight difficulty spike in August. The world’s largest cryptocurrency has seen three Bitcoin mining difficulty jumps this month, according to BTC.com, and another increase would drive difficulty beyond 30 trillion – which would mark the third time it ever occurred.
Bitcoin mining consultant BlocksBridge says a new difficulty surge is likely to be the biggest one this year. BTC mining difficulty currently stands at 28.35 trillion, over 10% below the all-time high of 31.25 trillion.
BlocksBridge says another major difficulty jump would bode well for the blockchain’s security but would also result in a hashprice drop as BTC fell below the $20,000 Monday. The decline in crypto prices this week came just days after Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment to continue hiking interest rates to bring down elevated inflation.
“We may see a difficulty jump doozy enough to set a new (or close to new) ATH in a few days. It’s great for the network security but unfortunately also means declining hashprice, especially with bitcoin’s price drop following Powell’s speech on Friday.”– Consultancy firm BlocksBridge
Higher mining difficulty also means miners face a more complex problem to solve to earn a Bitcoin. As such, it also implies they have to use significantly greater resources to achieve this.
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Bitcoin Falls Below $20,000 After Powell’s Speech
Bitcoin and other cryptocurrencies are in the red Monday, with the number one crypto asset currently standing at $19,834, down more than 15% in the past month. The decline comes amid a period of record-high inflation and several interest rate hikes by the Fed to bring down consumer prices.
During his speech at the annual Jackson Hole conference Friday, the U.S. central bank leader Jerome Powell said he will continue raising interest rates to bring inflation to the desired 2% target. Powell said a further tightening in the monetary policy could cause “some pain” to the U.S. economy “but a failure to restore price stability would mean far greater pain,” he added.
The latest drop in crypto prices was exacerbated by rumors that the defunct crypto exchange Mt. Gox is set to offload 137,000 BTC into the open market. The strong crypto sell-off this year has pushed many crypto firms into bankruptcy in recent months, including Voyager Digital and Celsius Network.
Do you think Bitcoin mining difficulty will continue soaring in the following months? Let us know in the comments below.