The mining difficulty of Bitcoin (BTC) rose by 2% on Wednesday, reaching a new all-time high after the recent halving event. This adjustment, at block height 840,672, marked the first time that Bitcoin mining difficulty increased following a halving event. Previous adjustments after halvings in November 2020, July 2016, and May 2020 saw decreases of -2%, 0%, and -6% respectively, with even larger decreases in the second adjustments post-halving.
Bitcoin mining difficulty measures the difficulty of mining a new block relative to the easiest it can ever be and adjusts every 2016 blocks, roughly every two weeks. This adjustment ensures that a new block is found approximately every 10 minutes, regardless of the number of active miners.
The recent rise in mining difficulty has been attributed to the reduction of block subsidy rewards from 6.25 BTC to 3.125 BTC post-halving. However, miners continue to earn additional transaction fee rewards for each block mined. Unlike previous halvings, the hash rate of Bitcoin has remained near all-time highs, indicating sustained miner activity and profitability.
Transaction fee rewards have surged post-halving, with fees exceeding block subsidy rewards in some cases. This surge in transaction fees has been driven by the hype surrounding Runes, a new fungible token standard for Bitcoin launched during the halving. Despite a drop in average transaction fees from the initial hype, Runes transactions still account for a significant portion of Bitcoin transactions.
The increase in total hash rate and mining difficulty post-halving reflects the maturity of the Bitcoin mining industry, with larger, well-capitalized mining operations dominating the landscape. Despite concerns about centralization, the industry is expected to consolidate further towards leading public miners. Some miners have seen record-high U.S. dollar revenues post-halving, indicating a robust financial position.
Looking ahead, attention is now focused on the future of Bitcoin mining leading up to the next halving event estimated for April 2028. With some experts predicting a $250,000 price target for Bitcoin, the industry continues to evolve and adapt to changing market conditions.
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