Bitcoin’s (BTC) difficulty is ready to skyrocket as soon as next week. This is due to the large number of miners that continue to enter the network and remain efficient. Transactions are also processed for very low fees at $0.08 transactions with medium priority. This difficulty increase is expected to make it more difficult for some miners to remain operative in the short term.
Bitcoin Difficulty To Skyrocket By Over 12%
Bitcoin’s difficulty is ready to surge by over 12% in the next adjustment. This is due to the fact that the total hash rate of the Bitcoin network has surged to new all-time highs at 250 million TH/s, as reported by blockchain.com. This difficulty adjustment of over 12% comes after a previous adjustment of 2.14%, which took place last week.
We can see in the image above that despite the China Bitcoin mining ban crash and the bear market that started at the end of 2021, miners continue to enter the network. Not only there are new machines that become more efficient and powerful, but Bitcoin mining companies are thinking about new and innovative solutions to earn BTC while using as multiple sources of energy as possible.
For example, with the energy crisis that Europe is facing, several retail users could purchase a BTC miner and heat their homes. Despite the fact that this remains a technology that needs to reach a larger user base, it could be a reality in the coming years at an industrial scale.
Moreover, several energy companies that produce an excess of energy and cannot do anything with it (meaning that it will be wasted), are using Bitcoin miners in order not to waste this energy. They are not only using energy that would otherwise be lost, but they are also helping the Bitcoin network to become more secure over time.
Despite the fact that in the short term there could be a correction in the Bitcoin hash rate, meaning that it can fall after a 12% increase in difficulty, the long-term remains on the upside. As new energy companies and retail investors continue to enter the market, there will be new profitable ways to mine Bitcoin without the need to spend money on energy sources.
Furthermore, there are several investments in renewable energy projects where mining companies invest a large sum of money upfront in renewable energy solutions (solar panels for example) and build the necessary infrastructure in order to create reliable and large Bitcoin mining farms. There is strong pressure from different industries trying to enter the Bitcoin mining market.
As new devices get developed (more efficient and powerful), with a larger number of miners trying to profit from cheap energy sources, there will be demand for protecting the Bitcoin network. To this, we should add the possibility of a strong price increase and new participants entering the market trying to mine Bitcoin with an extraordinary profit if Bitcoin’s price moves higher in a short period of time.