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Bitcoin Mining Difficulty Hit a New High at 16.55 TH/s amid Sharp Price Drop

Bitcoin mining difficulty has set a new all-time high of 16.55 T at the block height 620,928 at 11:05 UTC on March 9 despite bitcoin’s sharp price drop in the day. It is estimated that the mining difficulty will increase by 7.16% to 17.74 T in 13 days, according to BTC.com.

Bitcoin mining difficulty rate, a metric that shows how hard it is for miners to solve bitcoin blocks to receive the bitcoin reward, is designed to be adjusted roughly every two weeks, or 2016 blocks. When there are more machines joining in the competition to solve bitcoin’s hash function to earn newly created bitcoin, the difficulty will rise accordingly; when competition is less fierce, it falls.

Data indicates that the competition has recently been fierce. On March 4, bitcoin hashrate hit a new record high of around 136 EH/s, according to Blockchain.com. That means the bitcoin network’s hashrate increased by 20E in the past two weeks, or 400,000 units of mining machines has been newly put into use, assuming all are 50T miners.

The new highs bitcoin hashrate and mining difficulty reached suggest that more computing power is contributing to securing the bitcoin network, and more miners are interested in the profitability potential of bitcoin mining.

The positive metrics from the mining sector brings a little relief to the crypto market in red chaos. As some analysts including Wall Street veteran Max Keiser claim that hash rate highs (and therefore difficulty) will ultimately produce new bitcoin price highs. The argument goes that the higher the Bitcoin hash rate, the more secure the network, the higher the investor confidence will be, driving up demand.

Others, however, believe that the correlation between bitcoin price and difficulty works the other way round – hashrate and difficulty follows bitcoin price, as more miners get incentivized to dig the digital gold which will drive up the hashpower and correspondingly bitcoin difficulty.

Whether hashrate and difficulty follows price, or the other way round, it seems bitcoin miners, who are vigorously preparing for the long-anticipated halving, might be less affected by the latest price drop amid the big falls of global traditional markets.

While the increasing mining difficulty and the dipping bitcoin price together may put more pressure on those efficient miners whose mining profits are being squeezed. According to leading mining pool Poolin, bitcoin mining rigs like Antminer S9, Innosilicon’s T1 and T2 models, Avalon’s A841 and A821 machines have already reached their shutdown price at the current bitcoin price, in addition, the electricity rates of Antminer’s T15 and S17 series have taken up over half of their earnings, the latest 7nm ASICs are less affected in terms of profit.

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