The mining difficulty of Bitcoin (BTC) reached a summit of 127.6 Billions this week, but is expected to drop during the next difficulty adjustment on August 9.
The mining difficulty should drop by around 3% to 123.7 Billions during the next adjustment period, and the current average block time is approximately 10 minutes and 20 seconds, according to Coinwarz.
Cryptotic data show that the mining difficulty fell in June, with a clear drop at the end of the month and the first two weeks of July, when the difficulty fell to 116.9 Billions. However, the level of difficulty resumed its long -term trend in the last half of July.
The difficulty of extraction of bitcoin, and the hashrate of the network – the total computing power committed to secure the network – is at the heart of the profitability of minors and the maintenance of the high stock / flux ratio of Bitcoin, which protects the price of the BTC from overproduction.
In relation: Solo Bitcoin Miner Scores $ 373,000
Bitcoin difficulty adjustment and stock / flow ratio
The Stock / Flux ratio measures the total available offer from a financial asset or goods compared to the newly created offer added by minors or raw material producers.
The higher the ratio, the more the asset or the goods, the price changes caused by overproduction; The lower the ratio, the more the assets or the goods will be affected by a new offer.
This report is partly why the silver was demonetized by gold. Silver has a lower stock / flow ratio than gold. The rise in money prices attracts minors and producers to create more offer, which floods the market with new money and depressed prices.
Bitcoin has a higher stock / flow ratio than gold, with around 94% of the 21 million BTC supply already extracted and circulating on the markets. Gold, in comparison, has no difficult supply ceiling and an inflation rate of around 2% per year.
“The rarity of gold, the stock / flow ratio, is around 60. Bitcoin shortage is around 120. Thus, Bitcoin is 2x rarer than gold”, according to Planb, the creator of the Bitcoin Stock-Flow price analysis model.
The difficulty adjustment makes the price of bitcoin inelastic production, which is maintained proportional to the total computing power deployed by minors.
The adjustment of the difficulty prevents overproduction and collapse of subsequent prices due to due to a new offer on the market in large quantities over a short period.
As more computing power is deployed to secure the Bitcoin network, the difficulty increases to correspond to the new IT resources, keeping the production of blocks as close to the 10 -minute objective of the protocol as possible.
Conversely, if the computing power drops, the network difficulty adjusts to ensure that the new blocks are extracted at a regular rate of about 10 minutes.
Review: Bitcoin vs the threat of the quantum computer: chronology and solutions (2025-2035)
