Bitcoin’s mining difficulty is designed to adjust every 2016 blocks, which cumulatively are mined on an average 14 day period. In the past couple of months, we have observed Bitcoin’s mining difficulty steadily increase.
On June 16th, the Bitcoin network posted a difficulty increase of almost 15%; its biggest mining difficulty increase in nearly 2.5 years. The 14.95% increase was the biggest jump since January 2018. Throughout the rest of June and July, Bitcoin continued its trend of increasing difficulty. Most recently on July 13th, Bitcoin’s mining difficulty hit an all-time high, hitting a total rate of above 17 trillion for the first time.
In addition to the difficulty increasing, the hashrate has been steadily increasing as well. The upward trend in hashrate confirms that investment in mining machines has continued to grow after the halving.
With the continuous increase in Bitcoin’s mining difficulty and hashrate, it will become harder for older generation mining machines to stay profitable, and as a result, many old-gen will no longer be able to operate. We expect to see many hosting centers cycle out existing old-gen models, including our own. Over the past few quarters, we have been phasing out some of these old-gen machines with Responsible Recycling (R2) Certified partners. The R2 Standard provides a common set of processes, safety measures, and documentation requirements for businesses that repair and recycle used electronics. R2 is rigorously and independently audited, emphasizing quality, safety, and transparency. We at Core Scientific strive to be proper environmental stewards in the communities we operate in, and are proud to do our part.
As old-gen models continually get cycled out, after the Chinese rainy season, we really only expect to see any new hashrate coming from the newer generation machines. As part of that cycling out, we anticipate Bitmain’s Antminer S19 to be the new-gen machine that really drives hashrate growth over the next 12 months or longer, as it has twice the hashrate of its predecessor Bitmain’s Antminer 17.