3. Bitcoin Minning

What Is Mining Difficulty?

One of the terms that you will often come across in bitcoin-mining literature is mining difficulty. Mining difficulty refers to the difficulty of solving the math puzzle and generating bitcoin. Mining difficulty influences the rate at which bitcoin are generated. 

Mining difficulty changes every 2,016 blocks, or approximately every two weeks. The succeeding difficulty level depends on how efficient miners were in the preceding cycle. It is also affected by the number of new miners who have joined Bitcoin’s network, because it increases the hash rate or the amount of computing power deployed to mine the cryptocurrency. In 2013 and 2014, as the price of bitcoin rose, more miners joined its network, and the average time to discover a block of transactions fell to nine minutes from 10 minutes. 

But the opposite can also be true. That is, the more miners there are competing for a solution, the more difficult the problem will become. If computational power is taken off the network, then the difficulty adjusts downward to make mining easier.  

The difficulty level for mining in August 2020 was more than 16 trillion. That is, the chances of a computer producing a hash below the target is one in 16 trillion. To put that in perspective, you are about 44,500 times more likely to win the Powerball jackpot with a single lottery ticket than you are to pick the correct hash on a single try.

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