Bitcoin Mining Difficulty
What does the Bitcoin network mining difficulty mean?
The difficulty of the network is a parameter used to keep the average time between blocks steady. The Bitcoin blockchain is supposed to add blocks and release new coins at a steady predictable rate. For Bitcoin, blocks are mined nearly every 10 minutes. If miners are solving blocks more often than every 10 minutes, the difficulty increases. If miners are solving blocks less often than every 10 minutes, the difficulty decreases.
The more miners there are online, the more hashrate is produced. Hashrate is the total combined computational power that is being used to mine and process transactions on a Poof of Work (PoW) Blockchain. The hashrate difficulty adjusts accounting for situations and periods when more guesses are being produced. The more guesses there are, the more likely the right guess will solve the algorithmic code. The difficulty adjustment allows miners to verify the blocks at a consistent rate and are awarded for performing this action.
The greater hashrate also means greater security for the network. The more hash power the network uses, the more distributed the work is for each transaction that takes place on-chain. A higher hashrate ensures safety against attacks on the network which requires at least 51% of the Bitcoin hashrate.
A person or group that controls a majority of the hashrate could, in theory, block or reorganize transactions and even reverse their own payments. This would create double spend issues, which would undermine the integrity of the blockchain.
A fall in hashrate, means a reduction in the cost to perform a 51% attack, making the network more vulnerable to attack. So, more hashpower results in higher security and a more valuable network. Over Bitcoin’s history, the hashrate continues to increase.
You can view the difficulty of the network here and see how it stacks up over time:
https://www.blockchain.com/charts/difficulty
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