Glosarium

Difficulty

Easy

A measure of how hard it is to validate a new block on a blockchain.

What Is Difficulty?

In proof-of-Work based blockchains (such as Bitcoin), new blocks are added to the chain through mining, which involves solving cryptographic puzzles. 

The Bitcoin blockchain is designed to have a new block added roughly every 10 minutes. However, as the Bitcoin white paper predicted, the speed with which the cryptographic puzzles will be solved will fall over time due to advances in the hardware being used. 

This can be seen in the shift in mining technology from conventional desktop or laptop computers, to GPUs, and now to dedicated ASICs that are run in huge, highly regulated farm environments.

To offset the increases in hardware speed, the cryptographic puzzles are made more difficult. This difficulty is constantly revised, with the intention of targeting a specific number of blocks mined per hour.

The increase in difficulty on the Bitcoin blockchain is staggering. When BTC creator Satoshi Nakamoto mined the genesis block, they probably did so on a regular desktop computer. At this point, the difficulty was measured as 1. As of writing, the Bitcoin difficulty is now somewhere around 20 trillion.
Successful Bitcoin miners are rewarded with new coins. However, Bitcoin is designed with a hard upper limit on the number of blocks mined. When this level is reached, no new coins will be created — but mining power (or hash power) will still be required for the continuing operation of the network. In order to encourage this, the rewards for mining will change; instead of being awarded coins, successful miners will receive a share of the fees associated with transacting on the network.