- The Bitcoin mining difficulty caters for the improvements in mining power
- The difficulty rate adjusts automatically when certain levels are hit, making it harder to mine a block
- The difficulty rate ensures that the last Bitcoin will be mined in 2140
The Bitcoin mining difficulty rate is something that not too many people in the cryptocurrency world think about, but it is a critical part of the Bitcoin blockchain design. Every now and again it makes headlines, but what exactly is the Bitcoin mining difficulty rate and why is it so important to Bitcoin?
Mining a Block – How Hard Can it Be?
In essence, the Bitcoin mining difficulty rate is an indication of how difficult and time-consuming it is to find the right hash for each block on the Bitcoin blockchain. Miners compete to solve complex mathematical problems and be the one to add the next block to the blockchain, with the winner rewarded with 6.25 BTC.
Over time the amount of machines mining Bitcoin has grown as the endeavor has become more popular, increasing the amount of computing power aimed at the task of achieving this goal. If left unchecked this computing power would plough through the entire Bitcoin blockchain in just a few years, with the last block mined far earlier than 2140 as planned.
As a result, when the total computational power hits a certain level the difficulty level adjusts automatically, making it slightly harder for the blocks to be mined. A good comparison is the gradient increasing on a running machine in order to slow the runner down so they don’t finish a race too early.
Bitcoin Mining Difficulty Shows Satoshi Genius
It is easy to underestimate just how much of a forward-thinking concept the Bitcoin mining difficulty is. Bitcoin’s pseudonymous creator Satoshi Nakamoto knew that computers would become more powerful over time (he cannot have known that Bitcoin-specific ASIC miners would be created) and so he made sure to build in an algorithm that catered for such increases in power decades ahead of time.
The creation and implementation of a staggered Bitcoin mining difficulty rate is just one example of the genius of the person or persons who created Bitcoin and is the reason why Bitcoin is probably the most complete decentralized system in the world.
