BTC mining difficulty only resets at blocks of multiple of 2016 and stays constant for blocks in between. However, for derivative products to have a meaningful spot index, a continuous and (near) real time spot index is preferred. Thus, we use a moving window of past 2016 blocks to calculate a block weighted difficulty to be used as the spot difficulty index. Note that this block weighted difficulty converges to actual difficulty at resetting blocks.

# Why is there a spot difficulty index in the design? Isn't BTC mining difficulty a fixed value and being updated every two weeks?

S

Written by SynFutures

Updated over a week ago

Updated over a week ago