How Does the Network Difficulty Adjustment Impact the Valuation of Mining Hardware?
A difficulty adjustment impacts hardware valuation by changing the expected revenue stream. If difficulty increases, the hardware's profitability decreases, lowering its market value.
If difficulty decreases, the hardware's profitability increases, raising its market value. The hardware's efficiency (hash rate per watt) relative to the difficulty is the key valuation factor.
Glossar
Hardware Valuation
Assessment ⎊ Hardware Valuation involves determining the fair economic worth of specialized computational assets, like ASICs or GPU arrays, used in cryptocurrency mining or for high-frequency trading infrastructure.
Network Difficulty Adjustment
Process ⎊ Network Difficulty Adjustment is the automated mechanism within proof-of-work protocols that recalibrates the computational effort required to find a new block, ensuring consistent block time despite changes in total network hash rate.