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Change difficulty bitcoin altcoin how to

The first in-person Annual Meeting of the World Economic Forum since the start of the Coronavirus pandemic is the macro trigger of the week.

As the economic elite gathers in Davos, Switzerland, from May 22 through May 26, markets are gearing up for potential volatility on the back of their forthcoming remarks.

For Bitcoiners, the event tends to be a stressful one as the industry attempts to gauge sentiment among traditional finance heavyweights.

This year is likely no different — just one month ago, the WEF released a video arguing that Bitcoin should change its Proof-of-Work algorithm to Proof-of-Stake for environmental purposes.

An accompanying campaign, “Change the Code,” from Ripple co-founder and Executive Chairman Chris Larsen and Greenpeace USA, is attempting to gain mainstream support for the swap.

Moreover: “Experts” have found a way to move #Bitcoin from a decentralised network to a centralised, so they can control it.

This “change the code not the climate” campaign introduced by the WEF and financed by the wealthy has only one goal: Take over the control of #Bitcoin. pic.twitter.com/kMkXDLjLWc

— Carl ₿ MENGER ⚡️. (@CarlBMenger) May 8, 2022

The implosion of stablecoin TerraUSD (UST) this month further dragged crypto into the crosshairs of the financial establishment. Christine Lagarde, President of the European Central Bank, claimed that all cryptocurrencies are “worth nothing” and therefore — perhaps paradoxically — require regulation.

“It is based on nothing, there is no underlying assets to act as an anchor of safety,” she told Dutch television show College Tour in an interview released May 22.

Both the WEF and Lagarde have come under fire from Bitcoin sources, with even firms such as Swiss native Bitcoin Suisse showing little public tolerance for their criticism.

How much do the attendees of the #WorldEconomicForum really know about #Bitcoin, #crypto and the potential of #blockchain ⁉️ #WEF22

To help them (& Christine @Lagarde) out – we offer a short primer!

(Help us spread the word @thecryptovalley@TheBlock__@crypto@wef@FT)

— Bitcoin Suisse (@BitcoinSuisseAG) May 22, 2022

Just like El Salvador President Nayib Bukele’s Bitcoin-focused summit attended by 44 countries last week, meanwhile, this week’s Davos event will see a conspicuous competitor champion Bitcoin over fiat currency.

The Oslo Freedom Forum, to be held from May 23 through May 25 in Oslo, Norway, describes itself as “a global gathering of activists united in standing up to tyranny.”

Speaking at the event are a host of Bitcoin’s best-known names, including economist Lyn Alden, Strike CEO, Jack Mallers and Elizabeth Stark, co-founder and CEO of Lightning Labs.

“Two international forums starting tomorrow are on the surface similar, but diametrically opposed. The World Economic Forum and the Oslo Freedom Forum. A necessity of manipulated money is coercion, and the loss of individual rights and freedoms. See you in Oslo,” entrepreneur Jeff Booth, also due to attend, tweeted over the weekend.

Showdown as WEF plans to “change” Bitcoin

The first in-person Annual Meeting of the World Economic Forum since the start of the Coronavirus pandemic is the macro trigger of the week.

As the economic elite gathers in Davos, Switzerland, from May 22 through May 26, markets are gearing up for potential volatility on the back of their forthcoming remarks.

For Bitcoiners, the event tends to be a stressful one as the industry attempts to gauge sentiment among traditional finance heavyweights.

This year is likely no different — just one month ago, the WEF released a video arguing that Bitcoin should change its Proof-of-Work algorithm to Proof-of-Stake for environmental purposes.

An accompanying campaign, “Change the Code,” from Ripple co-founder and Executive Chairman Chris Larsen and Greenpeace USA, is attempting to gain mainstream support for the swap.

Moreover: “Experts” have found a way to move #Bitcoin from a decentralised network to a centralised, so they can control it.

This “change the code not the climate” campaign introduced by the WEF and financed by the wealthy has only one goal: Take over the control of #Bitcoin. pic.twitter.com/kMkXDLjLWc

— Carl ₿ MENGER ⚡️. (@CarlBMenger) May 8, 2022

The implosion of stablecoin TerraUSD (UST) this month further dragged crypto into the crosshairs of the financial establishment. Christine Lagarde, President of the European Central Bank, claimed that all cryptocurrencies are “worth nothing” and therefore — perhaps paradoxically — require regulation.

“It is based on nothing, there is no underlying assets to act as an anchor of safety,” she told Dutch television show College Tour in an interview released May 22.

Both the WEF and Lagarde have come under fire from Bitcoin sources, with even firms such as Swiss native Bitcoin Suisse showing little public tolerance for their criticism.

How much do the attendees of the #WorldEconomicForum really know about #Bitcoin, #crypto and the potential of #blockchain ⁉️ #WEF22

To help them (& Christine @Lagarde) out – we offer a short primer!

(Help us spread the word @thecryptovalley@TheBlock__@crypto@wef@FT)

— Bitcoin Suisse (@BitcoinSuisseAG) May 22, 2022

Just like El Salvador President Nayib Bukele’s Bitcoin-focused summit attended by 44 countries last week, meanwhile, this week’s Davos event will see a conspicuous competitor champion Bitcoin over fiat currency.

The Oslo Freedom Forum, to be held from May 23 through May 25 in Oslo, Norway, describes itself as “a global gathering of activists united in standing up to tyranny.”

Speaking at the event are a host of Bitcoin’s best-known names, including economist Lyn Alden, Strike CEO, Jack Mallers and Elizabeth Stark, co-founder and CEO of Lightning Labs.

“Two international forums starting tomorrow are on the surface similar, but diametrically opposed. The World Economic Forum and the Oslo Freedom Forum. A necessity of manipulated money is coercion, and the loss of individual rights and freedoms. See you in Oslo,” entrepreneur Jeff Booth, also due to attend, tweeted over the weekend.

How do you set a mining difficulty?

Miners use specialized ASIC hardware to mine Bitcoins. These machines are extremely fast and produce tetrahashes every single second. It will be extremely impractical for a system to painstakingly check every single one of them to see if they satisfy all the necessary conditions, or not. This is exponentially true for mining pools. They can’t check all the hashes produced by a bitcoin miner every single second. This is why mining pools use a concept called “Share Time.”

So, let’s imagine that your bitcoin mining pool has set a Share Time of 5 seconds. This means that, on average, your mining pool will require miners to submit a share to them every 5 seconds.

How exactly is this done?

Your bitcoin mining pool will set a value called Share Difficulty for every miner. The share difficulty of a miner is directly proportional to their individual hashrate. As such, higher the miner’s hashrate, higher their Share Difficulty. The idea is that the miner will use their equipment to generate tons of hashes. The moment they find a hash that meets the target Share Difficulty, they will send the hash to the pool.

How are the miners rewarded?

Miners in the pool are rewarded on a “Pay per share” (PPS) basis. In this system, the miners get rewarded for the shares they submit. The values of the shares are entirely dependent on how difficult it was to discover the share.

Let’s take an example to see how this works:

  • Suppose you are a miner with an individual hashrate of 50 TH/s.
  • The mining pool that you have joined has set your Share Difficulty at 1,000,000.
  • The moment that you get shares above 1,000,000, you’ll be rewarded by the pool.
  • The pool may change your difficulty to make sure that you are not submitting your shares too quickly.
  • Now, if you buy some new equipment and increase your hashrate to 150 TH/s, the pool will increase your difficulty to 3,000,000. You will be submitting shares at the same rate that you were previously submitting. However, you’ll get 3 times the reward that you were previously receiving for the shares you submit.
  • The reason why pools recommend higher difficulties for faster hardware is to reduce network load on both the miner’s system and the pool. It also reduces decreases the restart delay for your mining hardware as it prepares for the next work unit. At the same time, the pool must be careful not to set the difficulty too high which will result in a lot of stale shares.

NOTE: Share Target = 1 / Share Difficulty

On-chain quantity hits multi-month lows

Bitcoin has been famously boring for the mainstream shopper base all through 2022, thanks to cost motion, however now, even participation from present traders is waning.

On-chain knowledge reveals that volumes have been in regular decline, with the notable exception of the post-LUNA panic.

Glassnode, which tracks seven-day shifting common on-chain transaction volumes, recorded nine-month lows on Might 23.

From Might 9 onwards, the shifting common started falling precipitously, and by Might 22 had fallen 70%.

Whereas CryptoQuant’s Ki underscored the dearth of curiosity amongst retail consumers, fellow analyst Willy Woo argued that it was the massive gamers that basically held sway over market fluctuations.

“Little or no of the amount and subsequently impression on value comes from retail needing to purchase groceries,” he wrote as a part of a response throughout a Twitter debate final week:

“5% of the provision is owned by individuals who maintain lower than $30k of BTC, the majority of quantity is bigger traders who promote to hedge market danger.”

Hash rate increasing before the halving is seen as bullish

One example of the FUD that surrounds Bitcoin around the halvings, is the fear that the reduced block reward for miners will make mining unprofitable and cause a death spiral of decreasing hash rate, as miners capitulate.

This is not actually how it works. Mining is very competitive and successful mining outfits are usually operating on very thin margins of profitability. Instead of causing a death spiral, it usually causes smaller less profitable miners to be absorbed by larger more efficient firms.

To see the difficulty increase this close to the halving is usually perceived as being very bullish. The increased cost of production of new BTC, and reduced supply of newly minted coins, adds upward price pressure causing prices to rise.

Miners who manage to stay in operation and survive the halving, usually become more profitable as a result.

Much of the media hype surrounding the halving usually causes an onslaught of new users onboarding also, which kickstarts demand for BTC, also causing prices to rise.

Although mining as an industry tends to centralize as larger miners survive and smaller miners die off, they still end up becoming more profitable incentivizing more miners, even though rewards are less frequent, they are more valuable.

What do you think of Bitcoin’s increased difficulty adjustment? Let us know in the comments!

Images via Shutterstock, Twitter @100trillionusd @BitcoinPrinter

Showdown as WEF plans to “change” Bitcoin

The first in-person Annual Meeting of the World Economic Forum since the start of the Coronavirus pandemic is the macro trigger of the week.

As the economic elite gathers in Davos, Switzerland, from May 22 through May 26, markets are gearing up for potential volatility on the back of their forthcoming remarks.

For Bitcoiners, the event tends to be a stressful one as the industry attempts to gauge sentiment among traditional finance heavyweights.

This year is likely no different — just one month ago, the WEF released a video arguing that Bitcoin should change its Proof-of-Work algorithm to Proof-of-Stake for environmental purposes.

An accompanying campaign, “Change the Code,” from Ripple co-founder and Executive Chairman Chris Larsen and Greenpeace USA, is attempting to gain mainstream support for the swap.

Moreover: “Experts” have found a way to move #Bitcoin from a decentralised network to a centralised, so they can control it.

This “change the code not the climate” campaign introduced by the WEF and financed by the wealthy has only one goal: Take over the control of #Bitcoin. pic.twitter.com/kMkXDLjLWc

— Carl ₿ MENGER ⚡️. (@CarlBMenger) May 8, 2022

The implosion of stablecoin TerraUSD (UST) this month further dragged crypto into the crosshairs of the financial establishment. Christine Lagarde, President of the European Central Bank, claimed that all cryptocurrencies are “worth nothing” and therefore — perhaps paradoxically — require regulation.

“It is based on nothing, there is no underlying assets to act as an anchor of safety,” she told Dutch television show College Tour in an interview released May 22.

Both the WEF and Lagarde have come under fire from Bitcoin sources, with even firms such as Swiss native Bitcoin Suisse showing little public tolerance for their criticism.

How much do the attendees of the #WorldEconomicForum really know about #Bitcoin, #crypto and the potential of #blockchain ⁉️ #WEF22

Just like El Salvador President Nayib Bukele’s Bitcoin-focused summit attended by 44 countries last week, meanwhile, this week’s Davos event will see a conspicuous competitor champion Bitcoin over fiat currency.

The Oslo Freedom Forum, to be held from May 23 through May 25 in Oslo, Norway, describes itself as “a global gathering of activists united in standing up to tyranny.”

Speaking at the event are a host of Bitcoin’s best-known names, including economist Lyn Alden, Strike CEO, Jack Mallers and Elizabeth Stark, co-founder and CEO of Lightning Labs.

“Two international forums starting tomorrow are on the surface similar, but diametrically opposed. The World Economic Forum and the Oslo Freedom Forum. A necessity of manipulated money is coercion, and the loss of individual rights and freedoms. See you in Oslo,” entrepreneur Jeff Booth, also due to attend, tweeted over the weekend.

What determines bitcoin mining difficulty? Why does BTC difficulty increase?

#1 To maintain network integrity

The level of Bitcoin mining difficulty increases or decreases according to the ease of mining within the protocol. Remember, Bitcoin needs to have a consistent block time of 10 minutes. In other words, new BTC can be injected into the circulating supply every 10 minutes. To make sure that this timing doesn’t change the Bitcoin protocol:

  • Increases network difficulty when it becomes easier for miners to mine.
  • Decrease network difficulty when it becomes harder for miners to mine.

The Bitcoin network has a universal block difficulty. All valid blocks must have a hash below the target. Mining pools also have a pool-specific share difficulty setting a lower limit for shares.

#2 Relationship with hash rate

One of the critical metrics in judging the health of a proof-of-work network is hash rate. Simply put, hashrate shows you how powerful the miners are within the network. Higher the bitcoin network hashrate, higher it’s overall security and speed. However, these networks need to keep their hashrate under control for consistent block production. This is why, when hashrate becomes high, the bitcoin difficulty eventually gets higher as well, making it tougher for miners to mine easily within the network.

The inverse is also true.

If Bitcoin’s hashrate decreases, the network difficulty will reduce as well. Hashrate may decrease because of the following reasons:

  • Bitcoin currently has a high difficulty, which is why the miners are having a tough time mining in the system.
  • The price of BTC went down, which is why a lot of miners quit mining.

To understand the correlation between the two, let’s check out their graphs. Up first, we have the hash rate.

After that, we have the bitcoin difficulty chart:

As you can see, there is a very close correlation between the two. Around March 26, the network difficulty fell by 16% from 16.55 trillion to 13.9 trillion. This was the largest crash in network difficulty since early 2013. To understand why this happened this time around, look at how the hashrate dropped as well just before the bitcoin difficulty drop. This dip occurred because of Bitcoin’s price crash, which forced a lot of miners to quit operations.

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