Why difficulty matters
When more hashrate joins the Bitcoin network, blocks would be found faster without an adjustment. Difficulty increases or decreases every 2016 blocks to keep the block interval stable.
Impact on miners
Higher difficulty means each terahash earns fewer bitcoin, all else equal. That is why miner efficiency, power price, uptime and hosting costs are central to mining economics.
Planning a mining setup
Difficulty changes are one reason mining should be planned with realistic assumptions. Compare hardware efficiency and hosting costs before committing capital.