What Is the Purpose of the “Difficulty Adjustment” Algorithm in a PoW Blockchain?

The difficulty adjustment algorithm is a mechanism that automatically changes the difficulty of the mining puzzle. Its primary purpose is to maintain a consistent block production rate, regardless of fluctuations in the total network hashrate.

For example, in Bitcoin, the algorithm aims to keep the average time between blocks close to 10 minutes. If more miners join, the hashrate increases, and the difficulty rises to slow block production back down.

If miners leave, the difficulty decreases.