Despite speculation that miners might leave the ship after the 2020 Bitcoin halving, network security has mostly increased, and the hash rate reached a new ATH days ago.
In response, the network increased the difficulty of mining today by almost 10%, reaching a new historical record.
10% increase in Bitcoin mining difficulty
In creating the Bitcoin network, Satoshi Nakamoto introduced a self-sustaining feature that allows him to make significant adjustments based on related events. Known as a difficulty setting, it allows the network to improve or reduce the difficulty of mining, making it difficult or easy for miners to complete their work and be rewarded.
A valuable example came after the fall in prices in mid-March caused by the COVID-19 crisis, when some miners had to close their operations because low prices did not allow them to make a profit. Without any outside interference, the network reduced the difficulty by more than 10% in keeping miners incentivized.
The ultimate goal of difficulty adjustments is to keep the average time between blocks constant as the network hash power changes, Bitcoin made the exact opposite adjustment just a few hours ago. In block number 639,072, cryptocurrency # 1 improved difficulty levels by 9.89%, one of the most significant changes in history.
Adding another massive 14.95% rise on June 16, Bitcoin's mining difficulty level is now at a new all-time high of 17.35T, according to btc.com. Also, the next difficulty adjustment scheduled to occur in two weeks will increase by 9.76%, which would push it above 19 T.
Hashrate at highs
These adjustments take place every 2016 blocks (approximately every two weeks). Whether they reduce or improve the difficulty depends on the current state of the Bitcoin hash rate.
Usually, when the hash rate is higher, it means that miners are putting in more and more computational work to maintain the network, making it more robust.
Since miners receive rewards for their work, which halves after each halving, speculation began after the May 2020 halving that they might capitulate, leaving the network less secure and more susceptible to security challenges. Interestingly, that is precisely what happened days after the event, as the hash rate fell by more than 30%.
However, the situation was reversed shortly thereafter and the metric quickly started to recover positions. The continued increase led to a new all-time high recorded on July 8 as the 7-day average indicated TH 126 million / s.
Bitcoin bullish fundamentals
Bitcoin's increasing hash rate and consequently increasing mining difficulty adjustments are strong indicators that miners have not left the ship after their rewards decreased, despite some estimates claiming the price of BTC It must be around $ 15,000 to remain profitable. On the contrary, the network continues to improve its security and is more robust than ever.
Although the price of assets has recently stagnated, while many alternative currencies have risen, a recent report noted that Bitcoin had confirmed a buy signal, suggesting a future rise.
The analysis was based on Bitcoin's hash tape, a combination of moving averages of BTC's hash rate, which identifies market funds and mining capitulation. Ultimately, it could provide excellent buying opportunities. According to digital asset manager Charles Edward, the BTC hash tapes have just confirmed a buy signal, hinting that the next "big bullfight" begins.