Miners’ machines seem to be on and hard at work as mining Bitcoin (BTC) is about to get more difficult – reaching a brand new all-time high, thus increasing operational costs to mine the coin. Two industry players weighed in on what might come next.
Bitcoin mining difficulty, which is the measure of how hard it is to compete for mining rewards, is about to reach two milestones: an all-time high, and stepping into the never-before-seen 17 T territory.
The mining difficulty, if the current estimations by mining pool BTC.com come true, will rise 8.92% in little less than three days – completely skipping over the 16 T range this time, and climbing to 17.19 T.
This follows an unchanged difficulty level during the previous adjustment, and the highest jump in two years recorded in mid-June, which itself was preceded by the eight highest drop.
The last time the difficulty was above 16 T was in early May, before the third Bitcoin halving. But the previous all-time high happened even before that, in early March this year, with 16.55 T.
The price of bitcoin has been keeping steady in the lower USD 9,000 level, not making any major swings lately. At the time of writing (13:26 UTC), the coin is changing hands at USD 9,228, having dropped just above 2% in 24 hours and appreciated less than 1% in a week. The price is down by 6% in a month and 21% in a year.
The mining difficulty of Bitcoin is adjusted every two weeks (every 2016 blocks, to be precise) to maintain the normal 10-minute block time. Since June 30, it was below 10 minutes and dropped below 9 minutes yesterday.
The battle of generations
Meanwhile, the computational power of the network, known as hashrate, has been rising as well. Since the previous difficulty adjustment on June 30, hashrate (7-day moving average) jumped nearly 7%.
Discussing growing hashrate lately, while activity in the market dropped, Tim Rainey, Chief Financial Officer of Greenidge Generation, New York-based fully compliant cryptocurrency mine-power plant hybrid, said that the reason behind this is mainly newer-generation machines coming online from pre-orders, which were placed a few months ago.
“These newer [generation] machines pack in higher hashrate per machine than their previous generation,” Rainey told Our. “This difference is twice in the case of market-leading Antminer machines from Bitmain, where Antminer S19 has twice the hashrate of its predecessor Antminer S17. Furthermore, larger bulk orders from industrial-scale data centers, which have been cycling out their older machine models, have catalyzed this process.”
Meanwhile, BTC.TOP, a Bitcoin mining pool and mining services provider, estimates that no significant percentage of mining machines would be forced to shut down inside China, which accounts for approximately 70% of the total hashrate, the pool’s founder and CEO Jiang Zhuoer told Our.
“Experienced and industrial scale miners continue to mine profitably with the extremely popular old-generation Antminer S9 after firmware-level modifications that increase efficiency to meet their business models. They would continue to do so after the upcoming difficulty adjustment,” Zhuoer said.
As an example he gave an Antminer S9 miner that has a power efficiency of 92J/TH, stating that “with an Asic-boost enabled firmware and after underclocking it we are able to operate it at 78J/TH. Even if the machine’s performance has deteriorated over time, it can still at least achieve an efficiency of 85J/TH.” That may not meet the business model of some data centers given their electricity costs, but they can resell such machines to industrial-scale data centers, such as BTC.TOP’s, which have access to cheaper electricity.
BTC.TOP also doesn’t expect the hashrate to change much this summer. According to Zhuoer, there are two main reasons behind this: