Bitcoin’s price might have taken a hit as of late, but there is one metric that is still impressive: mining difficulty. Data from BTC.com shows that Bitcoin difficulty hit a new all-time high on Wednesday at 90.67 trillion hashes.
Hashing is a mathematical function performed by Bitcoin miners as part of the process of securing the blockchain. The higher the difficulty, the more computing power—and energy—needed to do the work.
The record-high difficulty has “significantly reduced margins for publicly traded mining companies,” Nishant Sharma, founder of BlocksBridge Consulting, a communications and research firm for the bitcoin mining industry, told Decrypt.
“[The difficulty level] is forcing them to either diversify into new revenue streams or double down on Bitcoin in hopes of a bull market,” he said.
“Those diversifying are repurposing their mining infrastructure for [high-performance computing] applications like AI,” Sharma added. “Meanwhile, those doubling down are hodling or buying more Bitcoin, following MicroStrategy’s example, which essentially acts as a Bitcoin ETF.”
Bitcoin miners are typically large operations that keep the network running by processing new transactions, enlisting large warehouses full of computers. Miners are rewarded for each block they process with Bitcoin. But with mining difficulty at a new high, they have to work harder to stay in business. In fact, some miners are having to close up shop altogether because the process has become so expensive.
In April, the Bitcoin network underwent an event called the halving. The update—which occurs every four years—cut miner rewards in half from 6.25 BTC for each block they process to 3.125 BTC.
The event naturally forces miners to work harder, meaning that eventually, only the most efficient operations in the industry stay in the game to keep the network going.
Bitcoin’s price currently stands at $63,188, a seven-day dip of over 6%. The asset hit a new all-time high in March of $73,737.