Bitcoin mining difficulty reaches new all-time high amid centralization fears
The increasing difficulty of the network and the need to pay for energy are pushing smaller companies and even publicly traded companies out of the market.
The mining difficulty of Bitcoin
BTC, a metric that tracks the relative challenge of adding new blocks to the ledger, reached a new all-time high of 142.3 trillion on Friday.
Mining difficulty hit consecutive record levels in August and September, driven by an influx of newly deployed computational power in recent weeks.
The Bitcoin hash rate, the average total computational power that secures the decentralized monetary protocol, also reached an all-time high of over 1.1 trillion hashes per second on Friday, according to CryptoQuant.
The increasing mining difficulty and the constant need for high-performance, high-energy-consuming computational power to secure the network are making competition between individual miners and corporations more difficult, raising concerns that Bitcoin mining is becoming increasingly centralized.
The greater difficulty has created tighter operational conditions for large miners in an already competitive industry, which operates with reduced profit margins.
The need to spend increasingly more computational resources to mine blocks on the BTC network has also raised concerns about the centralization of Bitcoin mining, as the cost of mining becomes progressively more expensive, leading to the dominance of large corporations and mining pools.
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