Pre-halving adjustments increase mining challenges.
Bitcoin mining difficulty has increased significantly ahead of the upcoming halving event, reaching an all-time high of 86.4 trillion. This adjustment, made on April 10, represents a 3.4% increase over the $83 trillion set on March 28. Since the halving is expected to occur in 8 days, this adjustment is likely to be the last adjustment before an event that reduces mining volume. Rewards are reduced by half.
Meaning of the half-life event
The Bitcoin halving, a major event in the cryptocurrency industry, is expected to occur on April 19. This event, which occurs approximately every four years, reduces the block reward for miners from 6.25 BTC to 3.125 BTC. Halving aims to control inflation and maintain scarcity by reducing the rate at which new Bitcoins are created.
Mining Difficulty and Hashrate Dynamics
Bitcoin mining difficulty is a measure of how difficult it is to mine a new block or solve a mathematical puzzle according to Bitcoin’s proof-of-work (PoW) consensus mechanism. Difficulty is adjusted every 2,016 blocks, or approximately every two weeks, to maintain a target block time of 10 minutes. The hash rate, which measures a miner’s computational power, also increased significantly, from 619EH/s on March 28 to 696EH/s on April 10.
Hashrate prediction after halving
The hashrate hit an all-time high of 727.9 EH/s on March 24, but some analysts predict a decline is possible after the halving. Mining analysts at Galaxy suggest that up to 20% of the current hash rate could go offline as miners turn off their equipment due to reduced efficiency after the halving. They note that as of the end of 2023, more than 70% of Bitcoin’s hashrate is generated by eight specific ASIC miner models.