Bitcoin Mining Difficulty Spikes to Record High in May; Number of Bitcoin ATMs Continues to Climb

While investors and the financial press have largely focused on Bitcoin’s blockbuster rally to record highs above $1700, much less attention has been devoted to the ever-increasing mining difficulty.

On Wednesday morning, the mining difficulty on the Bitcoin network underwent its 15th consecutive upward adjustment, rising 7.28 percent to a new all-time high, according to blockchain statistics site Bitcoin Wisdom.

This is the largest difficulty increase since January 22, 2017, when the difficulty jumped by 16.64 percent.

The mining difficulty adjusts every 2016 blocks - approximately every two weeks - in response to the amount of competition there is among miners. As more mining gear is deployed on the Bitcoin network, the difficulty is adjusted upwards to keep the rate of freshly minted blocks at 1 per 10 minutes.

Although the emission of Bitcoin remains steady after the difficulty is bumped up, the increased difficulty has a negative impact on how much coins go into the pockets of individual miners and mining pools.

Data from Bitcoin Wisdom also shows that between April 27th, the previous difficulty adjustment day, and May 10th, 271,988,635 GH/s (+6.8 percent) of additional mining power has been deployed.

At press time, Bitcoin Wisdom estimates the next difficulty hike, which is scheduled sometime between May 23-24, to be in the neighborhood of 8 percent. Of course this figure is likely to vary greatly over the next two weeks as mining capacity is added/subtracted.

While miners will have to compete even harder to mine new coins after today’s difficulty adjustment, the growing popularity of the Bitcoin brand has continued to fuel growth in the BTM (Bitcoin ATM) industry.

Consumers and investors around the globe can freely purchase Bitcoin with cash at 1170 BTMs across the globe, according to industry data by Coin ATM Radar. Last month, 42 new BTMs came online, and in the first eight days of May, 18 new machines were installed in gas stations and convenience stores in the United States, Canada and Europe.

Miner photo by Thawt Hawthje

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