Difficulty Bomb: Ethereum's Increased Difficulty in Mining

What Was the Difficulty Bomb? Ethereum's "difficulty bomb" referred to the intentional and sudden increase in mining difficulty on the blockchain. Ethereum was originally launched using proof-of-work, an algorithm that uses large amounts of energy and computational power. This mechanism uses a competitive reward system that encourages mining—and centralized mining farms that have taken over the network. However, this centralization goes against the original decentralization tenet behind cryptocurrency. The difficulty bomb was released to coincide with the blockchain's transition to proof-of-stake in 2022. The intent behind the difficulty bomb was to exponentially increase the amount of time it took to mine a new block on the Ethereum blockchain so that it: Encouraged cryptocurrency miners to move away from energy-intensive proof-of-work mining by removing the incentive Took away the ability to centralize currency creation and ownership Discouraged blockchain forks Forced node upgrades KEY TAKEAWAYS Ethereum's "difficulty bomb" referred to a sudden increase in mining difficulty designed to discourage miners from staying with the proof-of-work mechanism after it transitioned to proof-of-stake. Difficulty refers to the time and computational power needed to verify a cryptocurrency's transactions within a blockchain under the proof-of-work mechanism. Ethereum's difficulty bomb deployed at block 15530314 on Sept. 14, 2022, the day before "The Merge" went live. 1 2 Understanding the Difficulty Bomb In the world of cryptocurrency, the term "difficulty" describes a setting that keeps the network guessing for the target solution for a prescribed amount of time. It is calculated in different ways by different blockchains, but the most popular proof-of-work blockchains use the current difficulty, the expected time, and the actual time to calculate the new difficulty. Mining a cryptocurrency is often confused with creating a coin; however, mining is the verification process that involves guessing a 64-character hash that is less than the target value set by the network. When a miner's machine guesses correctly, they are rewarded with a new coin. Ethereum's developers created the difficulty bomb to increase the difficulty of solving the hash exponentially, eventually making it too expensive in time and energy to be worth the cost. Ethereum's developers always intended to move to proof-of-stake, which is claimed to consume 99.95% less energy than proof-of-work. 3 Ethereum's difficulty bomb is a deterrent for miners, who may have wanted to fork the original blockchain to continue mining using the PoW mechanism. The primary reason miners didn't want to switch to PoS is that the expensive mining machines and farms they created would become obsolete, at least as far as earning rewards for profits. Difficulty Bomb Challenges Migrating to PoS was an enormous challenge for the developers—they had to keep pushing the difficulty bomb release date back because The Merge kept being rescheduled. Releasing the bomb before upgrading to PoS would have been counterproductive—the difficulty bomb would have significantly slowed down transactions and severely congested the network. There have been six upgrades that, among other fixes, pushed back the difficulty bomb: 2017: Byzantium update 4 2019: Constantinople update 5 2020: Muir Glacier update (difficulty bomb only) 6 2021: London update 7 2021: Arrow Glacier update (difficulty bomb only) 8 2022: Gray Glacier (difficulty bomb only) 9 What Is the Difficulty Bomb? Ethereum's difficulty bomb was an intentional explosion of mining difficulty when the blockchain switched to proof-of-stake. What Is the Difficulty Bomb Block? Ethereum's difficulty bomb was released at block number 15530314 on Sept. 14, 2022. Which Cryptocurrency Is the Hardest to Mine? The hardest cryptocurrency to mine is Bitcoin because of the ever-increasing difficulty, decreasing rewards, and number of miners competing for the rewards. The Bottom Line Ethereum's difficulty bomb was an attempt by its developers to discourage miners from forking the blockchain and continuing proof-of-work on an Ethereum-like blockchain. It worked by increasing the difficulty level to a point where mining was impossible after the blockchain switched to proof-of-stake. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. Compete Risk Free with $100,000 in Virtual Cash Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you're ready to enter the real market, you've had the practice you need. Try our Stock Simulator today >>