There are lots of movies and articles on what Bitcoin difficulty is, and lots of charts on how it has switched overheen the past duo of years. But this isn’t indeed helpful if you’re thinking about investing ter cloud mining, or maybe even buying your own mining equipment.
This guide has our thoughts on what will affect Bitcoin difficulty overheen 2018.
Wij concentrate on key factors that may affect Bitcoin’s difficulty te this guide. If you’re looking for how profitable ASIC miners are te 2018, see this guide.
So let’s embark by looking at how Bitcoin difficulty has switched every Four months for the past Three years:
Jan 2015 – 43.9M, Increase of 47%
May 2015 – 48.5M, Increase of 10%
Sep 2015 – 59.3B, Increase of 22%
Jan 2016 – 103.8B, Increase of 75%
May 2016 – 194.2B, Increase of 87%
Sep 2016 – 220.7B, Increase of 14%
Jan 2018 – 336.9B, Increase of 53%
May 2018 – 560B, Increase of 66%
Sep 2018 – 922.7B, Increase of 54%
NOTE: Spil of 19th December 2018, many difficulty charts, including the one above, seem to be displaying outdated gegevens. Wij’ve posted a movie explaining the cause of this here.
Rate of Bitcoin difficulty increase
Looking at the Blockchain chart above for the past Two years, it certainly looks exponential, e.g. it doubles at the same rate every Four months. But the figures for the past Three years don’t do that, they vary significantly. Ter 2015 it took around 11 months for the difficulty to dual, te early 2016 around 6 months, ter late 2016 around 8 months and then te 2018 inbetween 5-6 months. Rather than doubling at a consistent interval, it seems to vary based on factors like available hardware and public rente.
What wij’re suggesting is that the rate Bitcoin difficulty is enlargening is not motionless, and can be anticipated. Right now, te December 2018, Bitcoin is very popular, with thousands of fresh investors and miners every day – so significant difficulty increases are to be expected. Many fresh people are interested ter bitcoin mining, permitting hardware manufacturers to sell miners te larger quantities, causing more total hashpower to be available – driving Bitcoin difficulty up.
The key relationship here is that the amount of fresh hardware becoming available is strongly linked to the request for it. A risk is that if the people making thesis miners produce too many, the difficulty will rise so quick that Bitcoin mining profitability goes down massively. This occurred for Dash when the Antminer D3 came out.
There are also scripts that can cause Bitcoin’s difficulty to decrease. August 2018 is a good example of this, where a lotsbestemming of miners moved their hashpower to mine Bitcoin Specie (spil it wasgoed more profitable at the time). This decreased hashpower mining Bitcoin, causing Bitcoin’s difficulty to decrease for Two weeks. If you stay up-to-date with thesis types of screenplays and mine the more profitable coins (Bitcoin Contant ter this screenplay), you can get reserve coins for Two weeks and sell them instantaneously for a fine terugwedstrijd on investment (or just HODL them!).
Another argument suggesting Bitcoin mining will remain profitable long-term is to look at it from the perspective of large mining operations. If you were a miner running a large setup, and Bitcoin mining wasgoed to no longer be profitable, then you’d likely begin mining something else that wasgoed. If there were no profitable coins for a long period of time, you’d likely have very high operating costs and be compelled to shut down your operation eventually. For a smaller miner running just a few Antminers or some cloud mining, this would be less of an punt. So ter theory spil long spil Bitcoin stays popular and its price proceeds to increase, if you can get cheap electro-therapy Bitcoin mining should always stay profitable.
This last argument te particular is very speculative, so be aware that for a worst-case script if Bitcoin’s price wasgoed to fall for a long-period of time, even if you had cheap electro-therapy, there’s a risk that mining it would no longer be profitable.
Bitcoin Mining Prize Halfing te 2020
Te June 2020, the prize for Bitcoin mining will half. This could cause big issues ter the long-term spil it essentially makes it half spil profitable overnight. So if miners are only making a petite profit prior to this, they’ll then be running at a loss just after it. At this point open-ended contracts on sites like Genesis Mining will likely no longer be profitable (albeit they might not even last that long).
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