Bitcoin mining difficulty increased by 634 billion units on 5 June 2018, from 4.306 to 4.940 trillion units. This is the largest difficulty increase in history, and comes at a time when Bitcoin’s mining hash rate is rapidly accelerating. In the past year Bitcoin mining difficulty and hash rate has increased 728%.
This latest difficulty adjustment represents an increase of 14.71%, the largest increase since January 2018 when the cryptocurrency markets were in a frenzy as Bitcoin hit all-time highs near USD 20,000. There were several difficulty adjustments in excess of 15% during the Bitcoin rally, but the magnitude of the 5 June 2018 increase far exceeds any other difficulty increase on record.
Mining difficulty is a measure of how many cryptographic hash calculations it takes to solve a block, and it updates every 2,016 blocks, which is almost exactly two weeks. The reason mining difficulty updates is to maintain a consistent block time of 10 minutes, which is the time it takes for the Bitcoin network to cryptographically hash the latest transactions into a block. The block time is equivalent to transaction confirmation time.
As mining hash rate on the Bitcoin network increases, the time it takes to find a block decreases, assuming difficulty is constant. For example, the block time had sharply declined to less than nine minutes before the latest difficulty adjustment. Once the automatic difficulty adjustment occurred, the block time went back to 10 minutes. Without the adjustments, block time would decrease to zero, which would be great for miners, but would cause rapid inflation of the Bitcoin supply, hurting its value relative to USD.
Hash rate has been skyrocketing, increasing from 30.83 to 35.37 exahash/s (1 exahash = 1 billion gigahash) over a two-week period between the last two difficulty updates. In the couple of days since the difficulty update, the hash rate has increased further to 37.25 exahash/s. This represents a tremendous amount of mining power joining the Bitcoin network.
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