The most recent jump may not seem like much when compared to the 20.86% increase seen on August 19, but that leap represented a “mere” increase of 4 billion in difficulty and less than 30 PH/s added to the overall hashrate. Next week’s increase is projected to be a 6 billion difficulty spike representing over 50 PH/s added. And with the better part of a week for new equipment to come online, those estimates may actually be low.
This is a huge double-whammy for miners. Not only is bitcoin more expensive to mine — taking longer to solve blocks, getting smaller pool shares for solved blocks, no reduction in hard electricity costs — but bitcoin’s price has been declining since June. With costs rising and returns shrinking, small-scale miners may soon cross the break-even point. This may already be happening, with the rising industrial-scale hashing centers masking the retreat of smaller home miners.
The increase in difficulty comes after a relatively modest 8.75% increase on September 13, and on the heels of a mercifully quiet period in July that saw three straight increases in the single digits. With hugely powerful, multi-petashash hashing centers popping up in Iceland, China and across the U.S., many smaller miners are facing a tough question: Cash out now, or invest in new, not-exactly inexpensive mining hardware to keep their incomes stable … until the next increase.