Challenges and Difficulty facing Bitcoin/ Crypto Mining
The Difficulty Of Bitcoin/Crypto Mining
What Is Mining Difficulty?
Mining difficulty is defined as the measure of how hard it is to locate a hash under a given target value during the POW (proof of work).
Why Is Mining A Bitcoin Block Difficult?
Mining a Bitcoin block is difficult as accepting a block is only possible if its target is greater or equal in value to the SHA-256 hash of a block header.
In simple terms: Every block hash initiates with a specific cluster of zeros. With so many zeros, there is a very low probability of computation of a block hash. This results in many trials before generating a hash. For generating a new hash, the hash cash function used in Bitcoin mining increases.
The Metrics Of Bitcoin Network Difficulty
This network difficulty in Bitcoin mining is a comparison between the instance it takes to identify a difficult block and the easiest block. After every 2016 blocks, this measure is recalibrated to such a value that the 2016 blocks from the previous cycle would have emerged in two weeks’ time if all miners were generating at the same difficulty. This way, each block generates every 10 minutes.
With more miners adding up, the block generation rate also increases. This will also raise the difficulty of a generation so that it can balance the increasing rate of block generation and push it back down. Furthermore, attempts to add fraud blocks by exploiters are straightaway declined by all miners in the Bitcoin network, so it is futile.
The Reward For Block Discovery
On discovery of a block, the user gets a particular number of Bitcoins as a reward. This reward is given to him/her after consent from all other miners in the network. At present, the reward compensation is set to 25 Bitcoins, whose value will be halved after the generation of 210,000 blocks.
Also, the users who carried out the transaction also compensate the Bitcoin miner with a certain amount. This compensation is given so that the miner can add the transaction to the block. Thus, as more Bitcoin miners join, the value of Bitcoin is likely to decay. Then, the compensation fees for adding a transaction is likely to be of high significance for generating an income through mining.