Bitcoin mining difficulty has risen to a record high of 142.3 trillion. This is fueling centralization as governments and energy companies push out small miners and even public corporations.

Bitcoin mining difficulty has risen to a record high, pushing out small miners

Bitcoin mining difficulty rose to an all-time high of 142.3 trillion on Friday, according to data from CryptoQuant. The metric measures how difficult it is to add new blocks to the blockchain and is a key marker of competition on the network.

Record hashrate figures

The rise in difficulty comes amid a sharp increase in hashrate — the combined computing power that secures the network. It topped 1.1 trillion hashes per second on Friday, also a record.

Centralization instead of decentralization

The increasing complexity of the process and the need for expensive computing resources are effectively crowding out small miners and even public corporations. This raises concerns about the centralization of the network: only those with access to cheap or free energy will survive.

Governments and energy companies are taking the lead

Several governments are already integrating Bitcoin mining into their economies. Pakistan announced in May that it would allocate 2,000 MW of surplus energy for mining, and Bhutan and El Salvador are also developing similar programs.

In the US, Texas energy companies are using mining as a tool to balance the load on the network. During periods of low consumption, they turn on farms to consume surpluses, and during peak hours they turn off equipment, stabilizing the operation of the electricity grid.

This gives them a competitive advantage: profits are generated without energy costs, while public mining corporations are forced to buy resources on the market.