Bitcoin (Bitcoin) may have tanked six-month low this week, but under the hood, the network is now demonstrably stronger than ever.
Data from on-chain monitoring resources, including glass node and BTC.com confirms that Bitcoin network difficulty hit a new all-time high on Friday.
The difficulty exceeds 26 trillion for the first time
Difficulty, which expresses how much miners have to work to solve the equations to process transactions on the blockchain, is arguably the most important fundamental component of the Bitcoin network.
The metric automatically adjusts to increase or decrease mining effort according to miner participation – the more competition between miners, the higher the difficulty.
As a result, mining remains stable regardless of factors such as sentiment, price, or unintended events.
After collapsing in mid-2021, it took the rest of the year for difficulties to bounce back, with the latest automatic readjustment adding 9.32% to previous levels. With that, it entered uncharted territory of 26 trillion.
Cryptocurrency journalist and commentator Colin Wu commented on the event written down that the rise is the highest in over half a year, with data from BTC.com confirming that the last adjustment of more than 10% occurred in late August.
BTC price decline fails to break miners’ resolve
The difficulty thus logically followed a higher hash rate, which had repeatedly set new record highs in the past year.
Related: Breaking the “bear market” in bitcoin demand will trigger the next BTC price surge – analysts
The hash rate, an estimate of the processing power of miners for the blockchain, is currently 192 exahashes per second (EH/s) after briefly peaking at 218 EH/s on Jan. 10 MiningPoolStatistics.
Bitcoin hash rate for the week beginning January 17 (screenshot). Source: MiningPoolStats
As Cointelegraph often reports, an old mantra among ancient hodlers is that “price follows hash rate,” although for many this trend is taking a backseat as fundamentals move in the opposite direction to spot price.
The growing hash rate thus implies that miners’ optimism about the profitability of their operations persists for longer periods of time. Calculations last week revealed their breakeven point be around $34,000.
