How Is the ‘Target’ Hash Value Calculated Based on the Difficulty?
The 'target' is a 256-bit number that determines the threshold a valid block hash must be less than or equal to. Difficulty is inversely proportional to the target.
The protocol stores the target in the block header as a compressed format called 'nBits'. The difficulty adjustment mechanism changes the target value based on the previous 2,016 blocks' average block time to ensure the 10-minute average is maintained.
Glossar
Average Block Time
Metric ⎊ Average Block Time is the mean duration required for a Proof-of-Work or Proof-of-Stake network to successfully validate and append a new block to the canonical chain, serving as a primary indicator of network throughput and transaction finality speed.
Target Value
Objective ⎊ Within cryptocurrency derivatives and financial engineering, the Target Value represents the predetermined price level or outcome against which the performance of a derivative contract is assessed.
Difficulty Adjustment Mechanism
Algorithm ⎊ Difficulty Adjustment Mechanisms represent a core tenet of blockchain protocol design, dynamically modulating mining or validation difficulty to maintain consistent block times despite fluctuating network hashrate.
Target
Precision ⎊ A target, within cryptocurrency derivatives and financial markets, denotes a predetermined price level or state serving as a focal point for trading strategies and risk management protocols.
Hash Value
Definition ⎊ A hash value, also known as a hash digest or simply a hash, is the fixed-size output generated by a hash function from an arbitrary input.