Mining Difficulty is a measure of how hard it is to find a hash below a given target, a requirement for adding a new block to a Proof-of-Work blockchain. This parameter adjusts periodically to maintain a consistent block production rate, regardless of the total computational power on the network. A higher difficulty means miners must perform more computations on average to solve a block, requiring greater energy and processing power. It serves as a fundamental mechanism for network security and predictable issuance schedules.
Context
News reports frequently mention Mining Difficulty adjustments, particularly for Bitcoin, as they significantly impact miner profitability and network security. An increase in difficulty often follows a rise in the network’s hash rate, reflecting greater competition among miners. Conversely, a decrease can signal miners leaving the network due to reduced profitability or other operational challenges. These adjustments are critical for maintaining the stability and long-term viability of Proof-of-Work cryptocurrency systems.
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