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Bitcoin is becoming harder to mine. The mining difficulty for the world’s biggest cryptocurrency’s jumped by 9.26% over the last two weeks, according to data from BTC.com.
Analysis by the website shows that the network’s mining difficulty is the highest that it has been since January, hitting 30.97 trillion, with the hashrate hovering over 230 exahash per second (EH/s) today.
Bitcoin mining is the process of using powerful computers to verify transactions on the blockchain. Mining companies, which are usually large operations that utilize server farms and use a lot of energy, are rewarded with newly minted Bitcoin.
Last month, miners in Texas suspended operations to help the energy grid and conserve energy during a heatwave—a move that likely made Bitcoin easier to mine.
They switched on again weeks later, and now as difficulty increases, miners could face slimmer profits as more computing power (and energy) is needed but the value of Bitcoin has remained stagnant.
Bitcoin at the time of writing was trading for $20,205, according to CoinGecko data. It has struggled to break past the $25,000 mark for months—and it is more than 70% down from the all-time high of $69,044 it touched in November.
Scott Norris, co-founder of the private Bitcoin miner LSJ Ops, told Decrypt that “difficulty shrinking is the cause for concern,” because it would mean more miners are dropping off the network—making it less efficient.
“A difficulty increase is an indicator of a strong and growing network, it's actually a good thing,” he said, adding that “sectors like gas and hydro are championing cheap energy costs and allowing for a new generation of long term mining to emerge.”
Zach Bradford, CEO of mining company CleanSpark, told Decrypt that only the most advanced and efficient operators will be able to succeed in the market.
"Bitcoin’s recent, if short-lived, run-up combined with the easing of heatwaves in some jurisdictions has contributed to more miners powering on and one of the largest difficulty jumps this year," he said.
"Some miners have chosen to power through the price depression with the expectation that Bitcoin’s price will increase over the coming weeks," Bradford continued. "Still, this difficulty jump will make it harder to earn bitcoin for miners since there is greater competition on the network."
Given bitcoin’s price and current energy prices, he said, the jump may not be sustainable.
Bitcoin mining has long been criticized for the huge amount of energy it uses, but more miners are turning to renewable energy sources to keep the network secure.
CleanSpark, based in Henderson, Nevada, runs its Texas and Georgia mining operations on clean, renewable energy.
Editor's note: this article has been updated to add comments from CleanSpark CEO Zach Bradford.