Bitcoin's mining difficulty is peaking since mid-September 2019 and is expected to hit ATH levels in less than two weeks, according to data from BTC.com.
Mining difficulty is an indicator of competitiveness among miners, so the more they compete with each other, the greater the difficulty.
This year, the mining difficulty has seen an increase of 15.65% from 13.80T to 15.96T, which represents a challenge for many small-scale miners, who will have to capitulate given their lack of power to stay on the business.
Today, April 21, Bitcoin faced an increase in mining difficulty of 8% from 14.72 T to 15.96 T, handling a hashrate of approximately 114.10 EH / s.
Bitcoin miners have not had such drastic increases in difficulty since September 13 last year when the network increased its difficulty by 10.38% from 10.77 T to 11.89 T.
The community is looking forward to what will happen after Bitcoin's halving
After halving, the miners' earnings will halve from 12.5 BTC per block mined to 6.25 for the same job. In light of this event, which will take place in just under 22 days, many miners are accumulating large amounts of BTC to finance themselves, while others, as explained above, will have to sell their bitcoin to stay afloat, which could reduce Bitcoin price.
Furthermore, cryptocurrency enthusiasts hope that Bitcoin will be more attractive to investors as fewer tokens will be issued and a price increase could be the most obvious result.
This thesis gains strength among cryptocurrency enthusiasts once they consider other factors that influence traditional markets. The current financial crisis, catalyzed by the coronavirus outbreak, has affected many of the strongest markets and financial institutions.
Perhaps the most notorious case occurred recently when oil futures contracts closed negative, something that has never happened. However, this is just the tip of the iceberg, a massive inorganic money print, even memedAlong with the unavailability of many basic products, medicines and even household products, it has impacted not only the lives of institutional investors but also of ordinary citizens.
Bullish case for #Bitcoin
-Crude oil collapse = cheap energy.
– Fear of hyperinflation rising.
– Taditional markets prove a joke.
– Commodities in turmoil.
– Consumers turning to savers.
– Hashrate + difficulty all time high.
– S2F model value <1.
– Halving in 20 days.
– A v B (@ArminVanBitcoin) April 21, 2020
This could be proof of the value of Bitcoin. Some believe this may be the perfect time for Bitcoin to be tested as a SoV, however it still depends on community acceptance to achieve such an important goal.
Perhaps sometime in the near future Bitcoin may experience a decrease in its mining difficulty. This is to be expected as fluctuations in difficulty are part of the design of Bitcoin's algorithm to ensure stable mining.
If many miners are active, the blockchain increases its difficulty and if there is little activity (as expected in this case where mining is no longer profitable for some), then it decreases. The most recent drastic drop took place on March 26 when network difficulty decreased by 15.95%.
But for now, we can only wait to see which groups will be able to bear the halving and 50% cut in profits, while the free market pays off.