What Is Causing Increased Bitcoin Mining Difficulty?
As we know, mining is the absolute backbone and essence of the system that is known as Bitcoin. The mining and sequential creation of digital currencies has become the very incentive that has caused the enormous explosion of Blockchain world-wide. The cost/profit ratio of running these systems has been prohibitive for the individual and has consequentially given rise to Mining Pools across the globe.
I have been mining Bitcoin in BitClub’s mining pool with for a little over a year. Centered in Iceland they use the cheapest electricity on Earth and the cold environment alleviates the energy needed for cooling their systems. These savings, in theory can then be passed on as profit to members of the pool. As expected, business profits for mining fluctuate amidst the wide range of existing and emerging variables that compose this technology. Slow data transfer, hiked rates, “forking around”, FUD and disappointment, not to mention the Coinbase monopoly are all playing a part to slow the behemoth down.
Mining has been hit hard the last few months as mining companies scramble to deal with Bitcoin’s many issues and adjust to the constant change the Blockchain demands. BitClub Mining Pool has also been scrambling to adjust as well as managing to expand their mining capabilities. Keeping up with emerging tech and investing big by means of building a new mining facility in Montana, BitClub has had nearly a 40% increase in Hashrate over the last week.
Their hashrate has increased from roughly 600 PH/s to nearly 1000 PH/s and hope to double that again by August and be processing up to 2000 PH/s. Not bad, it should be good news for members. However, things are not quite as great as one would assume over all.
As it is, the difficulty rate is rising faster than the price of BTC. Rationally when the value of BTC is low the difficulty should drop, but instead it has been increasing exponentially since the beginning of the year. In July 2017 the difficulty was 700 Billion, one year later -July 2018 it has increased to 5.3 Trillion.
What is causing this rise in difficulty? Dust? Solar flares? Network saturation? Banks “rocking the boat”? This increase in difficulty may force many miners and mining pools to stop mining BTC altogether or face going under. Since there is an inherent symbiosis with nearly every emerging currency, how will the status of Bitcoin affect E-Currency as a whole?
I still have great faith in Bitcoin and Blockchain in general, and I own many different currencies. If something is increasing the mining difficulty then it is imperative to determine if it is natural or if it is man made. Perhaps someone here on Steemit can shed a little light on what's happening in the mining world.
Looking for answers and seeking solutions to my own little gorilla in the room.
~Steemer-X