Bitcoin mining difficulty hits ATH of 39.35T

On Jan. 29, the bitcoin (BTC) mining difficulty, which is the complexity that miners must overcome to solve blocks, was adjusted upwards to an all-time high (ATH) of 39.35 trillion. The new figure is a 4.68% increase from the previous one, making it particularly difficult for miners to find a bitcoin block.

New difficulty adjustment is markedly lower

The latest percentage increase in mining difficulty is much lower than the 10.26% recorded in the network’s Jan. 15 adjustment, which moved from 34.09 trillion to 37.59 trillion. It has also been bettered on six occasions in the last 12 months, with the highest adjustment change, a whopping 13.55%, coming on Oct. 10, 2022.

Crypto analysts believe this is a good indication because the underlying implication is that the network requires more miners to validate transactions, increasing its security. The mining difficulty adjustment may also affect the price of BTC and provide some insight into the direction it might be headed in the short term.

BTC’s mining difficulty is automatically modified every two weeks to maintain a total block time of 10 minutes. According to the blockchain money transfer network OKLink, the next difficulty adjustment is scheduled for Feb. 11, and the website estimates it will probably rise by 4.41% to 41.09 trillion.

Bitcoin price on the rise

The price of BTC isn’t necessarily linked with the mining difficulty, as there have been instances where the price has remained within a narrow range. In contrast, at other times, it has been accompanied by a significant reduction or increase in price.

BTC price action for January 2023. Source: CoinGecko

Since the beginning of January, BTC prices have risen by about 42.7%. As seen in the chart above from crypto data aggregator CoinGecko, bitcoin was trading at $16,587 on Jan. 1, but at the time of writing, it had risen to about $23,683. The price rise could benefit BTC miners, but the 4.68% difficulty increase might mean significantly lower profits.

Majority of BTC hashrate is controlled by two mining pools

As well as the difficulty, BTC’s hashrate rose to 295.55 exahashes per second (EH/s). This number is still much lower than the ATH of 361.20 EH/s the network recorded on Jan. 6 at a block height of 770,709.

Furthermore, mining pool concentration has registered significant growth, with two mining pools commanding more than 51% of total hashrates in the last month.

BTC pool hashrate ranking. Source: BTC.com

As seen in the chart above, Foundry USA enjoyed a 31.87% share of the January hashrate, followed by AntPool with 19.53%. According to BTC.com, of the 4,613 blocks mined in the last 30 days, Foundry was responsible for 1,470, while AntPool had 901.

At the time of this writing, there are 65,704 blocks left to be mined before the next halving, scheduled for April 13, 2024. There are still about 1,723,13.75 BTC left to be mined, and the more the number dwindles, the higher the mining difficulty will be.