Bitcoin mining difficulty set to rise 18% next week

Home » Bitcoin mining difficulty set to rise 18% next week
Image source: Bitcoinwisdom.com

Image source: Bitcoinwisdom.com

As bitcoin’s price continues to decline, miners have gotten even more bad news. The projected difficulty is currently expected to jump 17.94% on Thursday, climbing from roughly 29 billion to 35 billion. The network hashrate, the key factor in determining difficulty, has grown dramatically in recent days, rocketing up from 213 Petahash per second to 265 PH/s since September 13. By comparison, the network passed the 1 PH/s threshold almost exactly a year ago.

The most recent jump may not seem like much when compared to the 20.86% increase seen on August 19, but that leap represented a “mere” increase of 4 billion in difficulty and less than 30 PH/s added to the overall hashrate. Next week’s increase is projected to be a 6 billion difficulty spike representing over 50 PH/s added. And with the better part of a week for new equipment to come online, those estimates may actually be low.

This is a huge double-whammy for miners. Not only is bitcoin more expensive to mine — taking longer to solve blocks, getting smaller pool shares for solved blocks, no reduction in hard electricity costs — but bitcoin’s price has been declining since June. With costs rising and returns shrinking, small-scale miners may soon cross the break-even point. This may already be happening, with the rising industrial-scale hashing centers masking the retreat of smaller home miners.

The increase in difficulty comes after a relatively modest 8.75% increase on September 13, and on the heels of a mercifully quiet period in July that saw three straight increases in the single digits. With hugely powerful, multi-petashash hashing centers popping up in Iceland, China and across the U.S., many smaller miners are facing a tough question: Cash out now, or invest in new, not-exactly inexpensive mining hardware to keep their incomes stable … until the next increase.

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