The price of bitcoin ( BTC ) may have dropped to a six-month low this week, but under the hood, the network is stronger than ever.
Difficulty exceeds 26 billion for the first time
The difficulty, which expresses how hard miners have to work to solve the equations to process transactions on the blockchain, is arguably the most important of the fundamental components of the Bitcoin network.
The metric automatically adjusts to increase or decrease the mining effort based on the participation of the miners: the more competition there is between them, the higher the difficulty.
This has the effect of keeping mining stable regardless of factors like sentiment, price, or unintentional incidents.
After falling in mid-2021, it took the rest of the year for the difficulty to recover, with the latest automated reset adding 9.32% to the previous level. With this, he entered uncharted territory above 26 billion.
Commenting on the event, cryptocurrency journalist and commentator Colin Wu noted that the increase is the highest in over half a year, with data from BTC.com confirming that the last adjustment of over 10% occurred in late August.
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The difficulty logically followed the hash rate, which last year continually hit new records.
The hash rate, an estimate of the processing power dedicated to the blockchain by miners, currently stands at 192 exahashes per second (EH/s), after briefly reaching 218 EH/s on January 10, according to MiningPoolStats.
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As Cointelegraph often reports, an old mantra among former miners is that “price follows hash rate,” but this trend is taking a backseat for many as fundamentals move in the opposite direction of price. cash.
The increase in the hash rate implies, therefore, that in longer time frames, the optimism of the miners about the profitability of their operations remains. Calculations from last week revealed that its break-even point is around $34,000.