18.06.2021

Bitcoin Miners Uber Bullish as Difficulty Set for 60% Quarterly Growth

With the exception of Q4 2018, the floor of the Bitcoin bear market, growth has been positive consistently ever since. 2019’s increases have been almost vertical compared to the previous period.

Bitcoin will see its mining difficulty grow by almost two-thirds in Q3 2019, new data reveals as the metric astounds markets.

Uploading historical and future projections to Twitter on Sept. 19, well-known analyst Kevin Rooke noted difficulty had already expanded at an average of 42% each quarter since 2016.

“Difficulty is projected to grow 60% this quarter, and it was already at an all-time high when Q2 ended”, he wrote in accompanying comments.

Bitcoin difficulty all-time chart
Bitcoin difficulty all-time chart. 

Difficulty refers to the amount of effort required to solve the complex equations which verify blocks of Bitcoin transactions and unlock block rewards.

The more competition there is on the Bitcoin network, the more difficulty increases; a lack of interest conversely sparks a decrease to incentivize participation.

Bitcoin metrics stronger than ever before

As Cointelegraph reported, Bitcoin mining difficulty is just one of the fundamental technical indicators to beat expectations this year.

Just this week, it was Bitcoin’s hash rate which hit all-time highs yet again, passing 102 quintillion hashes per second for the first time ever.

According to proponents, such progress precedes a similar jump in Bitcoin price, this nonetheless evading markets so far in Q3.

“Someone is confident”, Lightning Torch organizer Hodlonaut summarized on Thursday.

Bitcoin Miners Usually Create 6 Blocks per Hour. They Just Banged Out 16

In an unusual deviation from the norm, bitcoin miners just produced 16 blocks in 63 minutes, according to the Blockstream bitcoin block explorer. Four of the new blocks were mined within 46 seconds at 19:02 UTC on Friday.

Each new bitcoin block is produced every 10 minutes, on average. The exact time required to produce a new block can vary significantly and depends in part on the current mining difficulty level, which adjusts every 2,016 blocks, or approximately once every two weeks.

Bitcoin’s anomalous spree of new blocks was first noticed by Étienne Larrivée, bitcoin developer at Satoshi Portal, a Canadian bitcoin financial services company. “Four blocks in less than a minute doesn’t feel natural, but it’s most likely only variance”, Larrivée told CoinDesk.

Such rapid block production could signal bitcoin’s current difficulty level is too low, meaning mining new blocks is too easy. Or it could be a simple coincidence, the product of block time variability.

The event coincides with a six-month high in the aggregate size of unconfirmed transactions in bitcoin’s mempool. Bitcoin transactions are sent to the mempool, which serves as a sort of holding depot, after they have been verified by other non-mining nodes in the network. Miners then take transactions from the mempool and insert them into new blocks, which are then added to the Bitcoin blockchain.

Bitcoin’s mempool soared to 77.58 million bytes worth of unconfirmed transactions on Thursday, according to Blockchain.com.

The high number of unconfirmed transactions coinciding with such rapid block production is curious given that the job of bitcoin miners is to insert unconfirmed transactions in new blocks.

With bitcoin’s third halving less than two weeks away, Friday’s spree of new blocks could signal a significant upcoming mining difficult adjustment amidst a surge in mining power.

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