Bitcoin mining difficulty hits new all-time high amid record network hash rate
2024-10-23

Bitcoin mining difficulty rose 3.9% on Tuesday to hit a fresh all-time high amid record seven-day moving average hash rate levels for the network. The difficulty adjustment came at block height 866,880, reaching a record of 95.7 trillion, according to blockchain explorer Mempool, breaching the prior peak of 92.7 trillion set in early September.
Bitcoin mining difficulty is not expressed in specific units. It is a relative measure of how hard it is to mine a new block compared to the easiest it could ever be. The difficulty automatically adjusts every 2016 blocks — roughly two weeks — to ensure that, on average, a new block is found every 10 minutes, regardless of how many miners are actively mining.
Ahead of Tuesday’s adjustment, Bitcoin’s blocks were being mined at the faster-than-average rate of one block every nine minutes and 37 seconds, according to Clark Moody’s dashboard.
The higher the difficulty, the more computational power and energy a miner needs to find the right hash for the next block. When there’s an increase in the number of miners, the difficulty of mining bitcoin rises. Conversely, if there is a decrease in the number of miners competing to find new blocks, the protocol lowers the mining difficulty, making it easier for the remaining miners to discover blocks.
Bitcoin mining difficulty. Image: Mempool.
Bitcoin network reaches record total hash rate
On Monday, Bitcoin's hash rate, which measures the total computational power dedicated to the network by miners, also reached a new seven-day moving average all-time high of 723.63 EH/s — breaching 700 EH/s for the first time, according to The Block’s data dashboard.
Despite initially declining following Bitcoin’s fourth halving event on April 20, which saw block subsidy rewards halve from 6.25 BTC to 3.125 BTC, Bitcoin miners appear to be collectively ramping up their hash rate since bottoming out at a seven-day moving average of 550.25 EH/s in June.
Bitcoin miners saw a substantial decline in revenue following the halving, from a seven-day moving average peak of $72.4 million on the day of the event to the $25 to $35 million range since — squeezing out less efficient miners from the market.
This is also reflected in Bitcoin’s hash price falling to all-time lows of $0.04 in September, though this has subsequently recovered slightly to $0.048. Hash price refers to the expected value of 1 TH/s of hashing power per day, quantifying how much a miner can expect to earn from a specific amount of hash rate.
Public miners' continue to consolidate market share despite AI diversification
Despite the more challenging environment, as the surviving operators — dominated by U.S. public miners — begin to deploy new capacity, upgrade their mining rigs and consolidate market share, Bitcoin's total network hash rate is on the rise again. According to an Oct. 16 report by investment management firm and spot Bitcoin exchange-traded fund issuer VanEck, publicly traded bitcoin miners now account for a record 30% of the network’s total hash rate.
“This concentration means that any further pivots by these listed miners toward AI/HPC could have significant implications for global hashrate and difficulty,” VanEck analysts Matthew Sigel and Nathan Frankovitz said at the time. “Divesting from mining reduces the global hash rate and mining difficulty, making the sector more profitable for remaining players, all else being equal.”
Bitcoin miners’ strategies have diverged considerably in 2024, with the stocks of AI diversifiers like Core Scientific, IREN and Terawulf outperforming their pure-play bitcoin mining counterparts such as CleanSpark, Riot and MARA.
AI diversifiers have benefitted from increasing demand for high-performance computing and AI data center hosting services — given their valuable power contracts pipeline. However, pure-play firms have argued the return on bitcoin mining’s cheaper infrastructure and faster energization is far quicker than AI gestation periods, especially amid a potential bull run for the foremost cryptocurrency as it reapproaches all-time highs of nearly $74,000.
Bitcoin is currently trading at $67,318, according to The Block’s Bitcoin Price Page. Its price fell 0.4% in the last 24 hours but is up 6.6% over the past month and 59.2% year-to-date.
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