As the new era is evolving the demand for cryptocurrency mining is skyrocketing. But cryptocurrency mining is very painful, costly, and only scarce in reward. Nevertheless, mining has a gigantic appeal for many investors who are interested in cryptocurrency because of the fact that the miners are rewarded with crypto tokens for their work.
What is Cryptocurrency Difficulty?
The difficulty of Cryptocurrency is the study of the difficulty of mining a particular block of a blockchain for a specific cryptocurrency. As the cryptocurrency difficulty gets higher it will take extra computing power to verify the transactions entered on a particular blockchain— and this process is called mining of cryptocurrency.
Bitcoin and other cryptocurrencies which use work-proof blockchains are maintained by the process of mining. Miners verify the transactions that are done on a blockchain network and perform the duties of auditors to prevent fraud and ensure the authority of the transactions.
The mining difficulty level of a Bitcoin network is updated nearly every 15 days. Since the previous adjustments of the 13th of June, Bitcoin’s 7-day moving avg. hash rate has fallen from 138 EH/s to 87 EH/s — a downfall of 35 per cent.
The crypto reward, that miners receive as an incentive, motivates people to help in their primary purpose of mining: to validate and monitor Bitcoin transactions, ensuring their genuinity. For these kinds of commitments which are distributed among many other users from whole over the world, Bitcoin is a “decentralized” cryptocurrency or one that does not rely upon any central authority like a reserve bank or government to monitor its regulation.
The mining difficulty is adjusted after every 2,016 blocks, specifically for Bitcoin, or in other words, after that total number of blocks has been mined. The adjustment of the difficulty, whether it is going up or down is totally dependent on the number of miners within the mining network as well as their total hash-power.
Benefits of Cryptocurrency Difficulty
Now, someone might think that if the end result is meant for the miners to do the same process in a repetitive way, why should a network’s participants set up a higher cryptocurrency difficulty?
New Blocks generates in a Steady way – In the whitepaper of bitcoin of Satoshi Nakamoto, he explains how the proof-of-work difficulty helps to create a steady production of new blocks added to the blockchain. “To engage with the increasing hardware speed of today’s world, the proof-of-work theory difficulty is set on by a moving average, targeting the avg. the number of blocks in an hour. If they’re generated too quickly, it increases the difficulty.” 1 Bitcoin is modelled to add the newest block to the blockchain on an average of every 10 minutes. Other cryptocurrencies aim for more frequent blocks; for example, Litecoin generates in every 2.5 minutes. The biggest issue is that the total amount of computing power that is collectively controlled by the network’s miners can vary gigantically. When Satoshi Nakamoto mined the first ever block, there was only one machine on the network—mostly a simple laptop or desktop. Today there are tons of massive, warehouse-sized ASIC farms. ASICs are machines that are specifically designed to plough through the hash functions as quickly as possible. In order to get the steady average rate on the production of a new block in a network, the software is set in the automatic adjustment which makes the required hash up or down, which results in the difficulty level. When Nakamoto mined the genesis block, the difficulty of the bitcoin was one.
Security of Network – Because of the overall hash power provided to the cryptocurrency network’s security the cheaters or hackers would have to overcome the summarized hash power of the network to take control in a hostile attack. Some, specifically designed computers are used to perform hashing functions, to be able to make trillions of guesses every second to resolve the hashing problem. The higher the cryptocurrency difficulty, the more guesses or hashes are required to reach the goal hash requirement. This process, it makes very difficult and expensive for hackers to gain the majority control— which is called a 51% majority of the blockchain network.
Here are some of the Popular Cryptocurrencies and their Difficulty:
Bitcoin (BTC): 14.05 T
Dogecoin (DOGE): 3.19 M
Ethereum (ETH): 7.66 P
Monero (XMR): 301.27 G
Zcash (ZEC): 38.33 M
Ravencoin (RVN): 59.20 K
Litecoin (LTC): 8.92 M
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