Bitcoin: Network Difficulty Reaches an Unprecedented level

The halving last April did not leave Bitcoin miners unscathed. Despite an improvement in BTC’s price, small miners were the hardest hit, 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 reality.

A growing and historic difficulty for Bitcoin miners

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

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

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

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

Miners’ strategy in facing crypto network challenges

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

In the face of rising costs, miners are choosing to keep their rewards in BTC, hoping to sell at a higher price in the near future.

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

“Market dynamics must be considered,” explains Salman Khan, CFO of Marathon. Short-term fluctuations in the Bitcoin price greatly influence miners’ selling decisions.

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