Cryptocurrency Mining Difficulty and The Challenges for Miners

Since we already know what cryptocurrency mining is all about, it is time to talk about another very important aspect when it comes to cryptocurrency mining and that is mining difficulty… we all know that blockchains tries to create consensus between a number of computers or nodes that are on the internet… miners try to be the first to solve the complex problems and as such, it requires a lot of computational power and advanced mining hardwares to be able to solve these complex problems. This comes with a lot of difficulties and challenges and that is where mining difficulty comes in…

Mining difficulty is basically the unit of measurement used in the cryptocurrency mining process. It basically indicates how hard the computers used for mining have to work or how difficult it is to solve the complex problems during the mining process. The mining difficulty goes up or down over time as it depends on the number of miners in the blockchain network.

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Challenges for Cryptocurrency Miners

While cryptocurrency mining can be profitable, it also comes with a lot of challenges as well… one of the major challenges for cryptocurrency miners is centralization. We all know that the popular mining rig is the ASIC which has proven to be really effective in cryptocurrency mining. These ASIC miners are so powerful that is becoming extremely difficult to mine without ASICs. Even though this is great that the ASICs are a great cryptocurrency mining tool, they are also a challenge as huge miners are heavily influencing the price and also the way these ASIC machines are produced. Unlike other industries with a lot of manufactures, the ASIC manufacturers are not so many and this leads to centralization in the ASIC miners and difficulty for getting access to ASICs.

Another big challenge that cryptocurrency miners face is high power usage and energy cost… this isn’t a surprise because mining requires powerful hardwares to be able to solve those complex problems. These powerful hardwares and equipment consume a lot of power and as such incur high energy cost. Since mining requires miners to be the first to solve the complex problems, it results to miners competing with more and more computing power to be give them a chance of becoming the first to solve the problems… as computing powers increase, the power consumption increases as well and the energy cost keeps going high which reduces the profitability of the mining and this is one of the major challenges faced by miners.