On August 28, the network of Bitcoin (CRYPTO:BTC) saw an increase in its difficulty, creating additional difficulty for Cryptocurrency miners.
What happened
According to BitFinanzas, Bitcoin Mining will now require more time and money, making it even more difficult to achieve profitability in an already challenging environment since the last halving in April.
Conditions in the Bitcoin mining sector have become difficult since the halving. Many small and medium-sized companies have been unable to sustain themselves in the face of rising production costs and halving revenues.
Bitcoin’s stagnant price and upward adjustment in network complexity became a new challenge, leaving the difficulty at 89.47 trillion, very close to its all-time high of 90.67 trillion.
Bitcoin production cost skyrockets
The increase in difficulty brought with it an increase in production costs. According to the portal MacroMicrothe average cost of producing a BTC amounted to $72,600 as of August 27, while the price of Bitcoin on the spot market was around $61,000 at the time.
Companies listed on Nasdaq found themselves in a slightly better position, thanks to their ability to raise capital more efficiently. Some companies in Texas gained an additional advantage by reorienting some of their computing power toward artificial intelligence (AI), thereby diversifying their operations amid the crisis.
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The network hashrate showed improvements
Despite the challenges faced, the global hashrate of the Bitcoin Blockchain network showed signs of recovery, reaching 703 EH/s, according to data from BTC.comThis suggests that upcoming adjustments to network difficulty will follow an upward trend, presenting a new challenge for miners.
Why is it important?
The rise in Bitcoin’s network difficulty is a reflection of the growing competition in mining the cryptocurrency. As more miners join the network, the difficulty of mining new blocks increases, which in turn increases production costs.
This can have a significant impact on the profitability of Bitcoin mining, especially for smaller companies that may struggle to cover these rising costs.
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