Bitcoins (BTC) mining difficulty hit an all-time high of 127.6 trillion this week, but is projected to drop during the next difficulty adjustment on August 9.
According to, the mining difficulty will fall to about 123.7 trillion by about 3% in the following adjustment period. The current average block duration is around 10 minutes 20 seconds. CoinWarz.
CryptoQuant’s data indicates that the mining difficulty fell in JuneThe difficulty level dropped sharply at the end and first two weeks in July to 116.9 billion. The difficulty level returned to its upward trend in the second half of July.
Bitcoin mining difficulty, and the network’s hashrate — the total computing power committed to securing the network — is central to miner profitability and maintaining Bitcoin’s high stock-to-flow ratioBTC is protected from being overproduced by.
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Bitcoin’s stock-toflow ratio and difficulty adjustment
Stock-toflow ratio is the comparison of the supply available for a particular financial asset or commodity with the supply that has been created recently by the miners and producers.
The ratio is a measure of how resilient an asset or commodity can be to changes in price caused by excess production.
It is partly because of the ratio that silver has been demonetized. Silver’s stock-toflow ratio is less than that of gold. Silver prices rise, which encourages miners to produce more silver. This floods the silver market and lowers its prices.
Bitcoin is more liquid than gold with 94% of BTC’s 21 million available. already mined and circulating in the markets. In comparison, gold has no fixed supply limit and an annual inflation rate of around 2%.
“Gold scarcity, the stock-to-flow ratio, is about 60. Bitcoin’s scarcity is about 120. So, bitcoin is 2x scarcer than gold,” PlanBThe creator of the Bitcoin Stock-to-Flow Price Analysis Model.
Bitcoin is priced inelastic due to difficulty adjustments. Production, however, remains proportional.
The adjustment difficulty helps to prevent overproduction, and the subsequent collapse of prices due to new supplies being dumped in huge quantities on the market over a very short time period.
As computing power increases to protect the Bitcoin network the difficulty of the blocks will increase to keep them as close to 10 minutes as possible.
Conversely, in the event that computing power is reduced, then network difficulty automatically adjusts to ensure blocks are being mined steadily at about 10 minute intervals.
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Source: cointelegraph.com
