Certified Bitcoin Professional Practice Exam

How often is the Bitcoin difficulty adjusted?

1. Every week

2. Every 2016 blocks

3. Every 1000 transactions

4. Every day

The correct answer is: Every 2016 blocks

The adjustment of Bitcoin difficulty occurs every 2016 blocks, which is approximately every two weeks, depending on the network's transaction speed. This mechanism is critical to maintaining the average time between blocks at around 10 minutes, despite fluctuations in hashing power. When miners find blocks too quickly, the Bitcoin protocol increases the difficulty, making it harder to find the next block, which helps slow down the block creation pace. Conversely, if blocks are being found too slowly, the difficulty is decreased, facilitating faster block production. This self-regulating system ensures the network operates smoothly and helps manage the supply of new bitcoins effectively. The other options denote intervals or processes that do not align with how the Bitcoin network manages its mining difficulty. For instance, adjusting every week or day would not provide the necessary flexibility to adapt to the network's hashing power changes and could result in significant delays in block confirmations. Similarly, adjusting based on the number of transactions does not reflect the current network conditions effectively, as transaction volume can vary independently from mining power. The specific parameter of 2016 blocks provides a consistent and reliable metric for adjustment.