What Is the Practical Limit to How High the Mining Difficulty Can Be Set?

The mining difficulty has a theoretical maximum limit set by the protocol, which corresponds to the lowest possible target hash (the hardest puzzle). However, the practical limit is determined by the total hash power that the network can economically sustain.

As difficulty increases, the energy cost per coin rises. If the price of the coin does not keep pace, the difficulty will eventually outpace profitability, forcing miners to shut down and causing the difficulty to decrease at the next adjustment.