Bitcoin mining difficulty reached a new milestone by surpassing 100 trillion (T) for the first time, creating challenges for small miners in the industry. The seven-day moving average hashrate also peaked at 755 EH/s, reflecting the increasing computational power required for mining and processing transactions on the Bitcoin blockchain.
The higher difficulty level poses more pressure on small miners compared to larger, publicly traded companies. These smaller miners may struggle to keep their operations running smoothly due to limited access to cash resources. As a result, they may need to sell off a portion of their bitcoin earnings to cover operational costs.
Mining difficulty is a crucial metric that measures the level of complexity in discovering new blocks on the blockchain. The network adjusts the difficulty level every 2,016 blocks, or approximately every two weeks. This year alone, the difficulty has been adjusted 23 times, with nearly 60% of these adjustments being positive, making the mining process more challenging.
The increasing hashrate and mining difficulty indicate the growing competitiveness and capital intensity of the mining industry. Small and private mining companies face a tougher time compared to their larger counterparts, who have more financial resources at their disposal. Despite the challenges, miners, on average, are currently spending the entirety of the total mined supply.
In October, there was a brief period where miners retained a portion of their bitcoin earnings, contributing to their treasury reserves. This came after a significant depletion of reserves in August and September. Miners are currently mining around 450 bitcoins per day in this epoch, which translates to approximately $31.5 million worth of sell-side pressure if the entire supply is sold off.
Overall, the data suggests that miners are in a relatively stable position, with lower sell-side pressure when they retain a portion of their mined supply. The industry remains highly competitive, with small miners facing increasing challenges to sustain their operations in the face of rising difficulty levels and hashrates.
The recent developments in Bitcoin mining underscore the dynamic nature of the industry, with larger companies having a competitive edge over smaller players. As the mining landscape continues to evolve, small miners may need to adapt their strategies to remain viable in the long run. It is essential for all miners to closely monitor market trends and adjust their operations accordingly to navigate the challenges posed by increasing difficulty levels and competition in the industry.