Bitcoin Mining Reaches Record Difficulty Levels as Miners Chase Profit in 2023
Bitcoin mining has become more challenging, as its mining difficulty is anticipated to surpass 40 trillion this weekend.
This metric denotes the number of iterations miners have to carry out to get the hash of a Bitcoin block.
A higher number implies that solving a block is more difficult, resulting in lower mining profitability. The mining difficulty is updated every two weeks and rises when more miners join the Bitcoin network.
Mining difficulty has risen steadily in the past few months, primarily due to Bitcoin’s resurgence. In January 2023, the Bitcoin network reached an all-time high of 39.35 trillion, which then fell by 0.49%.
However, the difficulty has remained around 39 trillion. The hash rate also surged and reached a new all-time high on February 16, 2023.
The bear market in 2022 led to losses for many miners on the network, forcing some to diversify or stop mining and sell their equipment, leading to low mining difficulty and hash rate. But in 2023, Bitcoin’s market price increased by over 40%, which attracted miners looking to benefit from the trend.
Additionally, the rise of Ordinal non-fungible tokens (NFTs) on the Bitcoin network has increased activities, as these transactions incur larger fees, making them more attractive to miners.
Despite concerns about congestion and high transaction fees caused by Ordinal NFTs, miners have generated over $800,000 in fees from these tokens in less than a month, leading to increased mining difficulty.