Bitcoin

Bitcoin Price Will Surge to $31,000 Due to Increased Mining Difficulty

Although the crypto market couldn’t satisfy bitcoin enthusiasts and investors for a long time, there might be some good news for people constantly eyeing the price of bitcoin. According to PlanB, due to mining difficulties, bitcoin should cross the $30,000 mark. Using a model to study the difficulty cycle of bitcoin, a 1,000% gain to $31,000 bitcoin price was predicted by PlanB. The analysis concluded that the price of bitcoin will surge by 2021 which is only a few months away.

In the past, bitcoin mining had faced several difficulty cycles. During the analysis by PlanB, the trend of bitcoin price after experiencing a difficulty cycle was focused and explored. It was revealed that bitcoin price grew by orders of magnitude relative to the price of bitcoin in difficulty lows.

In 2013, compared to the last difficulty low, bitcoin rose to $1,300 worth with exceptional 50,000% gains. Later in 2017, the price improved by 9,000% before ending up at $20,000. As bitcoin hit a difficulty low in December 2018 when its price was about $3,100, after increasing at least 1,000%, the price of bitcoin is suggested to skyrocket around $31,000 by next year.

The difficulty of the bitcoin network is directly related to the hash power of the network. The computing power imparted to the network by miners is regarded as hash power. With the inclusion of miners participating, the hash power of the network increases and so does the difficulty.

Recently, the hash rate of the network climbed to an all-time high (ATH). Heading toward 100 quintillion mark, the hash rate managed to reach 94,779,758 TH/s (terra hashes per second). Just a few months ago, bitcoin hash rate acquired its previous ATH i.e 68,631,992 TH/s. Since then, the growth of the hash rate had substantially increased.

Previous activity shows that there is a correlation between bitcoin price and participation of miners. During April 2019, the hash rate of bitcoin was ranging between 40 to 50 quintillion. However, after April when the price of bitcoin rose, there was an increase in mining activities as well that caused the hash rate to jump around 90 quintillions.

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For completing a new block in the bitcoin blockchain, miners are rewarded 12.5 bitcoin. This shows that as the reward of miners is dependent on bitcoin’s price, a high price makes mining very attractive for miners. This explains how the price of bitcoin impacts the mining industry.

While the price of bitcoin influences bitcoin mining, the security of the bitcoin network is maintained by miners. Apart from security, some people have a firm belief that difficulty in mining leading to high rates means that the rate of bitcoin investments is on the rise as well.

During bitcoin mining, miners validate transactions made on bitcoin’s blockchain. They are responsible for adding new blocks of transactions to the blockchain. As they are spread all over the world, validating bitcoin transactions is not under the control of a single authority. This explains why bitcoin, unlike fiat currencies, is a decentralized digital currency.

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It’s been over a decade since bitcoin was introduced to the world by Satoshi Nakamoto. Ever since its inception, bitcoin has disrupted the financial system by offering an inflation-free digital currency. Over the course of 10 years, bitcoin surpassed several horizons and proved its worth to the world.

It would be of interest to see how the price of bitcoin keeps accelerating the hash rate while increasing difficulties of miners.

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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