What happened:;Bitcoin (BTC) mining difficulty hit its;all-time high, reaching 51.23 trillion as of the end of May. The figure has surpassed the 50-trillion level for the first time in its history. The 51.23 trillion difficulty accounted for a 3.4% increase from the previous measure. The difficulty has shown a steady increase since the beginning of the year. In early January, it was at the 34-trillion level. Bitcoin miners' monthly revenue;also experienced;a similar steady rise since the beginning of 2023. The total revenue reached $919.2M in May, hitting the highest level over the last 12 months, with a 13.7% monthly increase from the previous month. In January, the figure was reported as $601.2M.
Why it matters:;The mining difficulty refers to how difficult it is to mine a Bitcoin block. When the difficulty hits higher levels, miners require more hash rates, or computing power in a sense, to validate transactions and create new coins. Thus, the record-breaking difficulty level;means that;it has never been more difficult and time-consuming to mine the leading;cryptocurrency, Bitcoin, for crypto miners. This increase forces many miners to leave the network, raising the revenue per miner since they receive a larger share of the cake.
Where to see the impact:;On the other hand, the rise in revenue is expected to encourage more miners to join the Bitcoin network with a higher earnings promise. However, analysts expect the increased difficulty to cause the miner revenue to decline since their expenses would involve the costs related to rising hash rate, and hence, the need for more electricity. This could pave the way for more miners to leave the network again, creating a vicious cycle effect.