Network difficulty is a critical metric to note when calculating Bitcoin mining profitability. Difficulty is adjusted by the Bitcoin algorithm roughly every 2 weeks based on the total network hashrate, and ultimately determines how difficult it is to mine a new block. We’ve recently seen another jump in difficulty, as more and more hashpower is being turned on in the network.
Mining Difficulty Up 45% Since July
The latest difficulty jump on Monday, October 4 has brought network difficulty up to 19.89 T, a 4.71% rise since the last adjustment. This is the sixth consecutive difficulty increase, as it rises back up towards its all-time-high that was reached in May 2021. Previously, Bitcoin had recorded four consecutive difficulty drops which were mostly driven by Chinese miners going offline in response to the local crackdown. These four drops brought difficulty down substantially, decreasing from it's all-time high of 25 trillion down to 13.67 trillion.
Difficulty has since recovered by almost half from this 45% drop, which is a clear sign that a significant amount of the hashrate from China has returned online. Much of the hashrate has migrated out of China and into more crypto-friendly countries, including Kazakhstan, Russia, and the United States.
At the time of writing, difficulty is expected to rise another 2.34% on October 18th, where it will once again cross the 20 trillion line. On May 13th, difficulty was at 25T and miners were earning the equivalent of $0.24/TH at a BTC price of around $50k. Today, mining is still approximately 25% more profitable than it was in May. It’s important to note that this profit estimate is applicable only if you immediately sell your mined Bitcoin, which many smart miners do not do. With increasingly bullish forecasts for Bitcoin price in the future, the best thing to do is hold your mined Bitcoin for the next bull cycle.
How You can Secure the Latest-Generation Mining Equipment
As difficulty rises, margins decrease for miners as there is more hashrate on the network to compete against. It’s important to note that rising difficulty is a positive development in that it provides more security to the network and also attests to the rising global interest in Bitcoin. Miners who have the latest-gen equipment and attractive input costs are still able to mine at extremely wide margins, but ample supply of this equipment can be difficult to find.
Wattum has helped many miners in securing their orders of the top Bitcoin mining equipment, while establishing great electricity and hosting costs in some of the main mining outlets in the world. Through our strategic partnerships in a variety of regions, we are proud to be able to offer our customers some of the best prices, along with unmatched customer service. Get in touch with Wattum to secure your mining equipment today.