Bitcoin block generation speed hits new high, competition among miners becomes increasingly fierce

The most ingenious aspect of the Bitcoin designed by Satoshi Nakamoto is the algorithm that regularly adjusts the difficulty of mining. This setting is to ensure that new Bitcoins can enter the market at a relatively stable pace and is not related to market demand.

The difficulty of Bitcoin mining is adjusted every two weeks to integrate the computing power of new miners to maintain the setting of mining a block in an average of ten minutes as described in the original white paper.

This is actually the first time we have come across a currency that has these properties. Even gold, which is described as a “scarce” asset, does not have these properties, even though the amount of gold mined worldwide has continued to grow over the past 100 years.

The scarcity of Bitcoin has caused it to experience 3 to 4 rounds of bubbles in just ten years. As market demand weakens and circulation is dispersed, while supply remains relatively stable, Bitcoin prices fluctuate violently.

However, the algorithm that keeps the supply of Bitcoin constant is not perfect. Sometimes the demand for mining new Bitcoins is so great that it is difficult to maintain the original rate even with the difficulty increase. This is what has happened recently, just like in the bull runs of 2013 and 2017.

As can be seen from the above figure, the average number of blocks mined per day in the past seven days has exceeded 170 (that is, the price of the byproduct of computing power has reached a historical high), setting a record for the highest number of blocks mined per day since January 2018. According to the original speed of producing a block every ten minutes, about 144 blocks can be mined per day. But in fact, the speed of producing blocks is getting faster and faster, which is enough to show the urgency of the current market.

With less than a year until the Bitcoin mining reward halving, and the price expected to rise accordingly, it’s not hard to explain why miners are so eager to mine new blocks.

Regular investors are afraid of missing out on Bitcoin, but for miners who have spent millions of dollars on equipment that will quickly depreciate in value, this fear of missing out (FOMO) is even more real.

Source: Longhash