In this post, I’m going to explain to you the difficulty target as if you were in Grade 5. This post could be the second or third time I’m writing about this topic.
Firstly, let me define it;
Difficulty Target is a number that changes how long it takes for miners to verify transactions included in blocks on the blockchain.
Here’s a simpler example from our 5th grade back in school.
If it takes 10 minutes for 6 men to dig a trench and be rewarded K12 to share evenly according to their input.
1. How long will it take 12 men to dig the same trench?
2. How much will each now receive as a reward if the input is same?
Now, here’s a catch – the protocol rules in Bitcoin network states that; every 10 minutes, a block of transactions is mined and added to the blockchain. The “10 minutes” here is constant no matter the number of miners on the network.
° 10 minutes ~ block time
° 06 men ~ miners
° Dig ~ mine/verify
° Trench ~ Block of transactions
° K12 ~ Block Reward (it is 12.5 BTC)
° 12 ~ miners (increased)
From the example above, the 6 men (miners) are able to dig (mine) a trench ( block of transactions) in 10 minutes (block time) and get rewarded K12 (block reward) shared evenly ( in real application, it is shared according to ones total hash power on the network). This entails that, each man (miner) will get K2 as reward if they have similar energy ( Hash power)
Now, the number of men (miners) have increased to 12 to do the same trench (block of transactions), here, it is definite that they will dig the trench in less than 10 minutes, which is against the protocol rules and their reward will reduce to K1 each. So, to make sure that the 10 minutes is constant, this is where the difficulty target (check definition again) comes into play.
The difficulty target regulates how long it takes for miners to add a new BLOCK of transactions on the Blockchain. It changes every after 2016 blocks mined or roughly after two weeks.
Here’s what you must know;
• The number of miners influences the difficulty target in relation to block time.
• More miners on the network increase the difficulty target and reduce your reward. The network is said to be more secure.
• Fewer miners on the network reduces difficulty target and increases your reward. The network is said to be not secure, 51% attack is possible if the few miners can agree.