What Is the Impact of Difficulty Adjustments on a Miner’s Revenue Predictability?

Difficulty adjustments reduce a miner's revenue predictability. While the adjustments aim for a stable block time, the miner's share of the total block reward depends on their hash rate relative to the network's difficulty.

If the network hash rate increases significantly, the difficulty will rise, and the miner's expected revenue per unit of hash rate will decrease, making future profitability projections less certain. This uncertainty necessitates hedging strategies.