How Does a Cryptocurrency’s Difficulty Adjustment Mechanism Work?

The difficulty adjustment mechanism is an automatic protocol feature that ensures the time between finding new blocks remains relatively constant, typically around 10 minutes for Bitcoin. It periodically recalibrates the required computational effort (difficulty) based on the total hash rate of the network.

If blocks are found too quickly, the difficulty increases, requiring more hashing power. If blocks are found too slowly, the difficulty decreases.