Contrary to expectations of a decrease in mining difficulty after Bitcoin’s 4th halving, the data shows a different reality. The recent adjustment in mining difficulty, contrary to expectations, has even been on the increase, testifying to the robustness and adaptability of the Bitcoin blockchain.
Bitcoin miners continue to be profitable
Many analysts were predicting a decrease in the difficulty of Bitcoin mining in the medium term following halving, an event that divides the reward awarded to miners by 2. Less than a week later, we’re finally seeing the opposite effect.
In fact, the Bitcoin blockchain aims to maintain an average of 10 minutes between each of its blocks, and to achieve this, it has a mechanism for adjusting its difficulty. This mechanism adjusts according to the speed with which the last 2,016 blocks have been mined over a period of 14 days.
If these 2,016 blocks are mined in less than 14 days, then the mining difficulty will be increased. Conversely, if all 2,016 blocks are mined in more than 14 days, the difficulty will be reduced.
If halving had significantly affected miners’ revenues, to the point where some of them decided to pull the plug on some of their mining machines, we should have seen a decrease in mining difficulty after this event.
Bitcoin difficulty adjustment period
Or, at the end of the 2016 block period, we observe a 1.99% increase in mining difficulty, reaching a record level of 88,100 billion with a hash rate of 722 EH/s, which is contrary to expectations.
Even more surprising is the fact that, just one day after the start of the new difficulty adjustment period, miners have already mined 20 more blocks than expected, which could lead to a 9.31% increase in difficulty.
Does the Runes protocol impact miners’ revenues?
The Runes protocol is specifically designed for the creation of fungible tokens on the Bitcoin blockchain, offering a direct alternative to BRC-20 tokens, which are more complex and require higher transaction fees.
Although Casey Rodarmor, the protocol’s creator, presents it as primarily intended for memecoins, tokens often based on jokes and lacking technological fundamentals, this new type of token is nevertheless helping to boost activity on the Bitcoin blockchain as well as increasing the amount of fees collected by miners.
Composition of block number 840 823
The image above illustrates the composition of a recent block where, in orange, are the transactions using an “OP_RETURN”, a specific Runes feature.
Although Runes have accounted for around 68% of block transactions since the protocol was launched, and 43% over the last 24 hours, the fees generated don’t seem to significantly increase miners’ revenues to the point of justifying a notable increase in mining difficulty.
Indeed, although the hours following Bitcoin’s 4th halving saw record fees, with revenues exceeding $1 million per block for several hours, fees have currently fallen back to more usual levels, around 50 sats/vB.
