Bitcoin: The network difficulty reaches an unprecedented level

The halving last April did not leave Bitcoin miners unscathed. Despite an improvement in the price of BTC, small miners were the most affected, struggling to stay afloat. The network difficulty, already constantly increasing, has further increased significantly, making the creation of new blocks more expensive and complex. In this context, let’s examine the impacts and strategies adopted by miners to adapt to this new situation.

A growing and historical difficulty for Bitcoin miners

As last March, the difficulty of the Bitcoin network jumped by more than 10.5% on August 1, 2024, marking a new historical record. This increase in difficulty comes after three months of decline, during which the computing power needed to confirm transactions had decreased.

• New record difficulty: 90.66 trillion ;
• Increase of 14% on July 31, 2024.

This increase in difficulty imposes increased pressure on miners’ operational costs. Bitfarms, for example, saw its monthly revenues increase in July thanks to infrastructure updates.

However, this new difficulty could reduce these gains in the short term. Knowing that the maintenance of network security against external attacks requires this increase, but it also adds to the burden on miners.

Miners’ strategy in the face of crypto network challenges

Despite these challenges, the hashrate of the Bitcoin network has remained stable for nearly six months at 630 exahashes per second, another crucial indicator of network security.

Faced with rising costs, miners choose to keep their BTC rewards, hoping to sell at a higher price in the near future.

Marathon, for example, currently holds 18,536 Bitcoins, valued at over $1 billion, up 48% compared to its 2023 holdings.

“One must take market dynamics into account“, explains Salman Khan, CFO of Marathon. Short-term fluctuations in Bitcoin’s price greatly influence miners’ selling decisions.

The growing difficulty of the Bitcoin network poses significant challenges to miners, but optimism persists thanks to adaptive strategies and the potential rise of AI.