Mining difficulty

Mining difficulty is a measure of how hard it is to find a valid hash to mine a block. The hash of a valid block should be below the target hash, which requires N calculations. The smaller the target hash, the higher the mining difficulty, and the more calculations required. The difficulty adjusts based on fixed network rules to maintain a certain block production speed.

For example, Bitcoin adjusts difficulty every 2016 blocks to maintain a pace of producing one block every 10 minutes. This takes about 14 days. The difficulty of the next 2016 blocks depends on the block production time of the current 2016 blocks. If it takes 20160 minutes, the difficulty remains the same. If it takes less time, the difficulty goes up; if it takes more time, the difficulty goes down. The next difficulty will range from 75% to 400% of the current one.

With the PPS payout scheme, if difficulty stays the same, a higher hashrate results in higher rewards. If difficulty increases, rewards adjust down with the same hashrate. If difficulty decreases, the same hashrate will bring more rewards.