What Role Does the Difficulty Adjustment Play in Maintaining a Stable Block Time despite Hash Rate Fluctuations?

The difficulty adjustment algorithm is crucial for maintaining network predictability. If the hash rate increases, blocks are found faster than the target time.

The algorithm then automatically increases the difficulty, forcing miners to expend more computational power per block, thus slowing down the block production rate back to the target. Conversely, if the hash rate drops, the difficulty decreases, ensuring blocks are still found within the target time, maintaining a stable supply schedule.