Ethereum Mining Difficulty Just Inches Away from All-Time-High

Ethereum’s mining difficulty today hit a two-year high.

Mining difficulty on the Ethereum blockchain jumped to 3,650 terahashes at around 11:15 UTC today, its second-highest level ever, data from market analytics firm Glassnode shows.

By a hair. On August 9, 2018, Ethereum’s mining difficulty hit its all-time high of 3,651 terahashes, according to Glassnode.

Ethereum’s mining difficulty measures how hard it is to mine blocks on the Ethereum blockchain. Mining blocks are required to process Ethereum transactions.

The mining difficulty is determined by the number of active miners on the network. An increase in miners’ computational power pushes up the difficulty; this ensures the blocks are not generated at a disproportionately quick pace.

Ethereum’s mining difficulty has been increasing all year but took off at the end of August when this summer’s decentralized finance (DeFi) boom had its last hurrah. Investors plugged billions into Ethereum-based decentralized exchanges and money markets, resulting in a surge of activity in the Ethereum network.

The latest mining difficulty increase follows Ethereum’s booming price, which broke above $500 for the first time since the summer of 2018 and has been rising for months.

Perhaps Ethereum even has Bitcoin to thank. Bitcoin, the largest cryptocurrency by market cap, has increased in price by about $8,000 since the start of October, when its price was about $10,500.

Bitcoin’s mining difficulty tracks Ethereum’s, although Bitcoin’s mining difficulty is far, far higher, at 134.57 EH/s. An exahash is one quintillion hashes per second.

Earlier this month, Decrypt reported that Bitcoin’s mining difficulty recorded the second-largest adjustment in its 12-year history, when it fell by approximately -16%.

But Bitcoin miners have a long way to fall until Ethereum miners overtake them.