Difficulty adjustment is a programmed mechanism in Proof-of-Work blockchains that periodically modifies the computational effort required to mine a new block. This adjustment ensures that the average time taken to generate a new block remains relatively constant, regardless of fluctuations in the total network mining power. When more miners join, the difficulty increases; when miners leave, it decreases. This process maintains the predictable issuance schedule of new tokens.
Context
Difficulty adjustment is a fundamental feature for the stability and security of Proof-of-Work networks like Bitcoin. It prevents rapid block generation during periods of high hash rate and avoids network stagnation during low hash rate periods. News often reports on significant difficulty adjustments, which can reflect changes in miner participation or market conditions affecting mining profitability. This mechanism is critical for the long-term health and operational consistency of these blockchain systems.
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