The Bitcoin difficulty level recently enhanced by 7.09% recently. What is difficulty level and why is is significant?
Bitcoin is very likely the very first decentralized, distributed open source digital currency protocol to build up massive adoption. No sooner the concept of digital currency wasgoed introduced by Satoshi Nakamoto te his whitepaper, it garnered a loterijlot of rente from rekentuig scientists and cryptographers. Some of thesis people had already attempted creating a digital currency system with limited success. But Bitcoin suggested a solution to many problems that were faced by the researchers until then. Thesis very solutions were the reason for Bitcoin to become one of the widely adopted digital currencies ter the world till date.
The main intention behind the creation of Bitcoin wasgoed to empower individuals by providing them with an alternative way to conduct peer to peer transaction overheen the internet without having to go through the middle dudes or a trusted third party like banking and financial institution. Ter order to fulfill its purpose, the digital currency protocol has to meet certain criteria. Chic from being scarce, fungible and very divisible, it is significant for bitcoin network to maintain consistency. Consistency of the network takes a special place because of its distributed nature.
Wij all know that Bitcoin is an open source, decentralized digital currency where the miners, who are part of the Bitcoin community contribute processing power to detect fresh blocks and confirm transactions overheen the network. This is done by comparing the transaction ids with the existing record on the blockchain and inserting the fresh transaction records into fresh blocks. Technically, the time taken by a miner or a mining pool to detect a fresh block is directly proportional to the total processing power of the network, which te other words te known spil hash rate.
Bitcoin mining is now carried out using specialized equipment called Application Specific Integrated Circuits (ASICs) which are custom-built for the purpose. They have specialized circuits that churn out a loterijlot of processing power. Spil technology advances, fresh superior Bitcoin mining ASICs are being designed and fabricated. Thesis ASICs are far more efficient, both ter terms of the hash rate and power consumption. With the fresh advanced mining ASICs substituting the older versions, the total hash rate on the Bitcoin network has skyrocketed. Te an ideal situation, it would mean that the time required to create a fresh block drastically reduces too, leading to a proportional increase te the payouts. Te order to prevent such a situation, the difficulty level of the Bitcoin network is exploited to keep the time taken for block discovery onveranderlijk. The network automatically switches the difficulty level for Bitcoin mining to ensure the discovery of a fresh block every Ten minutes (600 seconds) by miners.
The Bitcoin network varies its difficulty levels after the discovery of every 2016 blocks to ensure a onveranderlijk output. If the network hash rate is high and the time taken to detect a fresh block is less than Ten minutes, then the network will increase the difficulty level proportionately to increase the block discovery time. If the block discovery time is more than Ten minutes, then the same protocol will reduce the difficulty level.
Ter latest days, the Bitcoin mining difficulty levels have bot permanently enlargening, thanks to enhancing network hash rate. Last week, the difficulty levels went up by overheen 7 procent. This is one of the highest hikes te the difficulty levels te the latest days, except for once ter February when it enhanced by 20 procent. The network’s hashing power presently stands at about 1279029147 GH/2nd (spil on April 14 , 2016). Thesis switches are absolutely necessary to ensure the reliability and sleek functioning of the largest digital currency network.