Bitcoin miners have been operating at a loss as the mining difficulty for BTC continues to rise. Despite occasional deviations, the average cost of mining a Bitcoin was $19,270 higher than the price of BTC on the same day. To offset these losses, mining businesses are hedging their positions with financial products such as energy futures contracts. The Bitcoin protocol adjusts mining difficulty to ensure a controlled distribution of new BTC and maintain a maximum limit of 21 million coins. The adjustment is based on the frequency of block discovery over a two-week period, aiming for a new block every 10 minutes. If the interval between blocks is too long or too short, the mining difficulty is adjusted accordingly. The mining difficulty adjustment is limited to a maximum increase of 300% or a maximum decrease of 75%. The number of zeros in the mining process determines the mining difficulty.
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