From 57fdd9344728131e50521f9fa85e3093965df878 Mon Sep 17 00:00:00 2001
From: Ignacio Porte <ignacio.porte@buda.com>
Date: Sun, 2 Mar 2025 16:34:13 -0300
Subject: [PATCH] feat: add difficulty adjustment tool and info about it

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+---
+title: 'Bitcoin Difficulty Adjustment'
+description: 'Understanding how Bitcoin automatically adjusts mining difficulty to maintain consistent block times'
+date: '2024-03-19'
+author: 'DecodingBitcoin'
+layout: TopicBanner
+icon: 'FaTools'
+category: 'Tools'
+---
+
+Bitcoin's difficulty adjustment mechanism is one of its most important features, ensuring that blocks are mined at a relatively consistent rate regardless of how much mining power (hashrate) is on the network.
+
+## How Does Difficulty Adjustment Work?
+
+Every 2,016 blocks (approximately 2 weeks), Bitcoin automatically adjusts its mining difficulty based on how quickly blocks were mined in the previous period:
+
+- If blocks were mined too quickly (less than 10 minutes on average), difficulty increases
+- If blocks were mined too slowly (more than 10 minutes on average), difficulty decreases
+- The maximum adjustment is limited to 4x increase or 1/4x decrease
+
+This self-correcting mechanism helps maintain Bitcoin's predictable issuance schedule and ensures network security remains proportional to mining investment.
+
+## Live Difficulty Estimator
+
+This tool monitors the current mining difficulty and estimates the next adjustment:
+
+<DifficultyEstimator />
+
+## Why is Difficulty Adjustment Important?
+
+1. **Predictable Issuance**: Keeps block times around 10 minutes, maintaining Bitcoin's planned supply schedule
+2. **Network Security**: Adjusts difficulty to match total network hashpower
+3. **Mining Economics**: Helps balance mining profitability as hardware efficiency improves
+4. **Decentralization**: Allows Bitcoin to adapt to changing network conditions without central coordination
+
+## Technical Details
+
+The difficulty adjustment formula is: 
+
+```
+new_difficulty = current_difficulty * (actual_timespan / target_timespan)
+```
+
+
+Where:
+- `target_timespan` = 2,016 blocks * 10 minutes = 20,160 minutes (2 weeks)
+- `actual_timespan` = time taken for last 2,016 blocks (measured in seconds)
+- `actual_timespan` is constrained between 1/4 and 4 times the target to limit volatility
+
+### Key Components
+
+1. **Target (nBits)**
+   - A 256-bit number that a block hash must be below
+   - Inversely proportional to difficulty
+   - Stored in compact format in block headers
+
+2. **Block Time**
+   - Target average: 10 minutes
+   - Natural variance due to mining's probabilistic nature
+   - Measured over 2,016 block periods
+
+3. **Adjustment Period**
+   - Every 2,016 blocks (≈ 2 weeks at 10 min/block)
+   - Fixed schedule based on block height
+   - No adjustments between periods
+
+## Network Hashrate
+
+The network hashrate can be derived from the current difficulty:
+
+```
+hashrate ≈ difficulty * 2^32 / 600
+```
+
+
+This gives us the approximate hashes per second (H/s) being performed by all miners. The actual hashrate may vary due to:
+- Mining luck (statistical variance)
+- Changes in active mining equipment
+- Network latency and orphaned blocks