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Mining difficulty

Now that you know what Bitcoin mining is, you might be thinking, “Cool! Free money! Where do I sign up?” Well, not so fast… Satoshi Nakamoto, Bitcoin’s inventor, crafted the rules for mining in a way that the more mining power the network has, the harder it is to guess the answer to the mining math problem.

So the difficulty of the mining process is actually self-adjusting to the accumulated mining power the network possesses. If more miners join, it will get harder to solve the problem; if many of them drop off, it will get easier. This is known as mining difficulty. Mining difficulty adjusts every 2016 blocks Difficulty Adjustment Difficulty is self-adjusting in order to create a steady flow of new Bitcoins into the system.

In a sense, this was done to keep inflation in check. Mining difficulty is set so that, on average, a new block will be added every ten minutes (i.e., the number will be guessed every ten minutes on average).

Now, remember, this is on average. We can have two blocks being added minute after minute and then wait an hour for the next block. In the long run, this will even out to ten minutes on average. The difficulty adjustment is done every 2016 blocks (every 2 weeks on average) retroactively. Meaning, every 2016 blocks the system looks back on the past 2016 blocks and calculates the average block time. If it’s under 10 minutes it will increase the difficulty, if it’s over 10 minutes it will lower it.

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