Winnie Muriuki

· 22 Nov 2021

Follow Following

Everything You Need to Know About Bitcoin Difficulty

When someone mentions the term bitcoin difficulty, what comes into your mind? If you have no idea what it means or aren't sure whether your guess is right or wrong, this article is a must-read. It discusses the meaning and much more about bitcoin's difficulty. So, let's take a look at what it is all about.

What is Bitcoin Difficulty?
Bitcoin difficulty is the measurement of the number of hashes that need to be generated to validate the solution for the next block, leading to the miners earning a reward. It is a huge determinant of how easy or hard it will be to mine the next Bitcoin block. It is important to note that bitcoin difficulty is not a constant. If you wonder why that's the case, we will also be discussing the reason shortly.

What is the Importance of Bitcoin Difficulty?
From the definition of this term, one might assume that it is a bad thing. However, it is something crucial in the cryptocurrency world, and Bitcoin is no exception. Let's take a look at some of its benefits.

1.    It enhances the network security
Did you know that the attacker must overcome the entire network's hash power for a successful malicious attack? Consequently, the hash rate of a particular network is enough to give you an idea of its security. That explains the existence of special computers with the capabilities of performing hashing functions. Thanks to the computers' designs, they can make a considerable amount of guesses, amounting to trillions, within a second, leading to a valid solution of a particular hashing power.

When it comes to any cryptocurrency, including Bitcoin, the difficulty becomes of great importance. After all, the higher the bitcoin difficulty, the more the hashes or guesses needed to get the hashing problem solution. Under such circumstances, it becomes not only hard but also costly for an attacker to hit the blockchain networks' 51% majority. That's the significant role that the bitcoin difficulty plays in ensuring that the network is as secure as possible.

2.    It Maintains Consistency of the Rate of Mining a New Bitcoin Block
The average time needed to mine a new bitcoin block is 10 minutes. That's all thanks to its difficulty, given the rate at which the hardware speed is increasing. Gone are the days when people used simple desktops and laptops. On the contrary, new and stronger machines keep emerging, not forgetting the many huge ASIC farms that keep popping up. With such a huge hardware speed, it is possible to mine a new block within seconds. That wasn't what Satoshi Nakamoto had in mind when he created bitcoin.

For the network to maintain a steady rate, the bitcoin difficulty keeps changing. Therefore, once the rate at which new blocks are generated increases, the bitcoin difficulty automatically increases. The vice versa is also true to ensure that a miner doesn't take forever to mine a bitcoin block.

Given the importance of bitcoin difficulty, it is now easy to understand why it exists in the first place.

#b #bitcoin #bitcoindifficulty