It’s the metric that many Bitcoin investors don’t know—or care—about. But they should, despite the biggest and oldest digital coin’s price taking a hit earlier Monday.
Bitcoin’s mining difficulty has edged up again to touch a new high. Data from CoinWarz shows that the difficulty hit a new all-time high of 110.45 trillion on Sunday. That means it’s harder than ever before to mine a new block.
In the world of Bitcoin, mining operations scattered around the world—typically large warehouses full of specialized computers—race to solve mathematical problems. The quickest to solve the problems processes transactions, which make up blocks.
The blocks are then added to Bitcoin’s ledger of transactions, and miners are rewarded for their speed with newly minted digital coins. It’s measured by something called hashing—which is basically just turning data into a fixed-length string of letters and numbers.
It’s a complex and costly process—and one that requires a lot of equipment and energy. But the potential reward can be sizable indeed, with 3.125 BTC, or nearly $295,000 worth at the current price, awarded for successfully winning a block.
And with the difficulty of mining new blocks increasing to new highs, Bitcoiners should be happy: it means the network is stronger and more secure than ever.
The biggest cryptocurrency by market cap’s price hit a new high in December of over $108,000 per coin. It’s since dipped on fears that America’s central bank may be slow to cut interest rates; cryptocurrencies—like stocks—have tended to do well in low-interest rate environments.
Bitcoin is currently priced at over $94,170, data from CoinGecko shows, rising after a brief dip below the $90,000 mark early Monday.
Edited by Andrew Hayward
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