On February 2, 2024, the Bitcoin network witnessed a significant surge in its mining difficulty metric, increasing by 7.33% at block height 828,576. This marks the largest difficulty increase of the year so far, bringing the current difficulty level to 75.50 trillion, reaffirming itself as the most challenging period for Bitcoin mining to date.
The sudden 7.33% increase in mining difficulty sets a record for 2024, following a 3.90% decrease observed on January 20. Thus far in 2024, there have been two increases and one reduction in mining difficulty. Additionally, we are nearing the fourth halving event, which is less than 11,500 blocks away and will lead to a reduction in BTC mining rewards.
The new all-time peak of 75.50 trillion represents the threshold at which a block's hash must reside to be considered valid. Currently, the collective hashrate stands at 536 exahash per second (EH/s), slightly below the all-time peak of 566 EH/s reached on January 29, 2024.
Examining the three-day block discovery metrics reveals two dominant pools, accounting for over 60% of the total. Foundry USA leads with 31.94%, boasting 173.53 EH/s, while Antpool closely follows with 159.17 EH/s, constituting 29.30% of the overall hashrate. The next mining difficulty retarget is scheduled for February 15, 2024.
Risks and Complexities of Bitcoin Mining
The Bitcoin mining sector has become significantly more challenging, with a notable increase in the difficulty metric. However, mining remains an unstable and too risky area for investment. A Cantor Fitzgerald report warned that 11 public mining companies will be on the brink of collapse after the halving if the price of Bitcoin remains at $40,000.
Several factors contribute to the risks of the mining sector, including taxation, legal regulations, cryptocurrency volatility, halving, inflation, and the risk of loss and equipment breakdown.
Comparison with ULTIMA and SMART Blockchain
The launch of the marketplace and vouchers with up to 50% cashback in ULTIMA represents an innovative alternative to mining. ULTIMA also introduces a crypto debit card, offering convenience to users.
The halving of ULTIMA, which will reduce the number of daily tokens, is eagerly awaited and could influence the value of the ecosystem.
The split contract of ULTIMA and its rewards distribution differs from traditional mining, offering an alternative approach to participation in the blockchain ecosystem.
Bitcoin mining, despite its challenges, remains a crucial part of the crypto ecosystem. However, alternatives like ULTIMA and SMART Blockchain offer new possibilities for engagement and investment.
[avatar p20] Disclaimer: The information provided in this article is based on publicly available data and official statements, accessible through the indicated sources. This article is provided for informational purposes only and is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Explore the Ultima Ecosystem: If you are interested in further exploring the Ultima ecosystem and delving into the opportunities it offers, we invite you to visit the following link: Ultima Ecosystem. It is emphasized that participation in financial projects, including those related to cryptocurrencies, requires attention and awareness. Make sure to fully understand the risks and potentialities before making any decisions. Your financial security is of primary importance.
Glossary
- Bitcoin (BTC): The first and most famous cryptocurrency, invented by Satoshi Nakamoto in 2008 and launched in 2009.
- Bitcoin Mining: The process through which new Bitcoins are created and transactions are confirmed on the Bitcoin network.
- Halving: An event that occurs approximately every four years in the Bitcoin protocol, during which mining rewards are halved.
- Mining Difficulty Metric: A measure of the difficulty of solving the cryptographic problem necessary to confirm new blocks on the Bitcoin blockchain.
- Hashrate: The total computing power of the Bitcoin network, measured in hashes per second.
- Exahash per Second (EH/s): A unit of measurement of hashrate, equivalent to one quintillion hashes per second.
- Foundry USA: One of the major Bitcoin mining pools.
- Antpool: Another prominent Bitcoin mining pool.
- Block Discovery Metrics: Data related to the frequency and distribution of block discoveries.
- DeFi: Decentralized Finance, a financial system operating on blockchain and utilizing smart contracts.
- Smart Contract: A self-executing contract based on blockchain that automatically executes the conditions defined within it.
- ULTIMA: An alternative blockchain and cryptocurrency mentioned in the article.
- DEX (Decentralized Exchange): A decentralized exchange that allows users to trade cryptocurrencies directly with each other.
- Delegated Liquidity Pool: A mechanism through which participants in a DEX can provide liquidity to the market.
- Token SPLIT: A cryptocurrency associated with a split contract on the ULTIMA Blockchain.
- Burn Fee: A fee in SMART tokens that is destroyed.
- CryptoQuant: A cryptocurrency data analysis platform.
- Burn Wallet: A wallet address created specifically to destroy or "burn" cryptocurrencies.
- Marketplace: An online platform where goods and services can be bought and sold.
- Cashback: A partial or total refund of a portion of money spent on a purchase.
- Bitcoin ETF: Bitcoin ETFs are financial instruments that allow investors to participate in the cryptocurrency market without directly owning Bitcoin. Bitcoin Spot ETFs, in particular, physically hold the digital asset, unlike Bitcoin futures ETFs that invest in contracts betting on the future price of BTC.
- Bitcoin Spot: An ETF that physically holds Bitcoin, offering direct exposure to the current price of the cryptoasset.
- Bitcoin Futures: An ETF that invests in contracts betting on the future price of Bitcoin.
- GBTC (Grayscale Bitcoin Trust): The first Bitcoin trust fund listed on a US stock exchange, currently awaiting approval as a Spot ETF.
- Exchange Traded Funds (ETF): Exchange-traded funds that allow investors to buy or sell shares of a diversified portfolio of financial assets. ETFs can be traded like common stocks on an exchange.
- Bitcoin ETF Spot: An Exchange Traded Fund that tracks the price of Bitcoin directly, holding the cryptocurrency in physical reserve. In other words, a Bitcoin ETF Spot owns actual Bitcoin in reserve.
- Securities and Exchange Commission (SEC): A US government agency responsible for regulating and overseeing the securities and investment industry.
Innovation in the blockchain world continues to offer alternatives and challenges for investors and cryptocurrency enthusiasts. Understanding the risks and opportunities in this dynamic sector is essential for navigating the financial future.
Trivia
- The Securities and Exchange Commission (SEC) is a US government agency established in 1934 during the Great Depression. Its creation was a direct response to the need to regulate and oversee the securities and investment market to protect investors and promote transparency and efficiency in financial markets.
- The SEC is tasked with enforcing federal laws on the issuance and trading of securities, monitoring the activities of publicly traded companies, credit rating agencies, broker-dealers, and stock exchanges. The agency also strives to provide investors with accurate and timely information, as well as to combat fraud, market manipulation, and illegal practices in the financial sector. Its authority also extends to regulating corporate operations, mergers and acquisitions, and initial public offerings (IPOs). The SEC plays a fundamental role in ensuring the stability and integrity of the US financial markets.
