Why Does the Network’s Difficulty Target Change over Time?
The network's difficulty target changes over time to maintain a consistent block discovery rate, which is a fundamental requirement of the blockchain protocol. As more miners join the network and the total hash rate increases, blocks are found faster.
The difficulty target must then increase to slow down the block discovery rate and keep it at the target time (e.g. 10 minutes for Bitcoin).
Glossar
Difficulty Target
Challenge ⎊ The Difficulty Target, within cryptocurrency derivatives and options trading, represents a dynamically adjusted threshold influencing mining rewards or contract payouts.
Difficulty Target Change
Adjustment ⎊ The difficulty target change represents the calculated, discrete adjustment to the mining difficulty parameter, executed automatically by the protocol after a predetermined number of blocks have been mined.
Difficulty Target Adjustment
Adjustment ⎊ The Difficulty Target Adjustment is the protocol-mandated mechanism that periodically recalibrates the computational threshold required for block creation, ensuring that the average time between new blocks remains stable despite fluctuations in the total network hash rate.
Target Time
Interval ⎊ Target Time defines the ideal, protocol-specified interval between the successful mining or validation of consecutive blocks on a blockchain, such as ten minutes for Bitcoin or a few seconds for many Proof-of-Stake chains.
Block Discovery Rate
Parameter ⎊ This is the engineered interval between successful block discoveries, designed to maintain consistency in transaction finality and network throughput.
Network Difficulty
Algorithm ⎊ The network difficulty, fundamentally, represents a dynamically adjusted parameter within blockchain systems, primarily designed to maintain a consistent block generation rate irrespective of computational power fluctuations.