Bitcoin Records Largest Drop in Mining Difficulty Since December 2022

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The Bitcoin mining difficulty fell by 5.7% earlier Today. This drop is notable as it marks its highest negative adjustment since December 2022 when the difficulty fell by 7%.

Details of Recent Bitcoin Mining Difficulty Drop

According to data from Bitbo, the recent Bitcoin difficulty adjustment came at block 842,688, dropping to 83.1 trillion. Bitcoin mining difficulty measures how difficult it is to solve the complex cryptographic puzzles used for mining.

Mining difficulty in the Bitcoin network is adjusted automatically after 2,016 blocks have been mined in the network. This process automatically adjusts roughly every two weeks to maintain an average block creation time of 10 minutes.

The amount of miners in the network determines how difficult it is to mine additional units over time. The difficulty of mining Bitcoin increases when the number of miners on the network increases. On the contrary, the mining difficulty reduces when fewer miners are competing to find new blocks.

Bitcoin’s Hash Rate Slump

This recent negative difficulty adjustment is correlated with a 10% decline in Bitcoin’s hash rate since the previous difficulty adjustment on April 24. This is evidenced by a drop from a seven-day moving average of 639.58 EH/s to 578.74 EH/s as of recent data.

Before this adjustment, average block times stretched to 10 minutes and 36 seconds. The dip in hash rate resulted in Bitcoin’s hash price plunging to an all-time low of $50 per PH/s per day ($0.05 per TH/s per day) on April 29, simultaneous with Bitcoin’s price retracement below the $63,000 level. Currently, Bitcoin is trading at around $61,000, according to CoinMarketCap’s data.

Why Bitcoin Mining Difficulty is Falling

The recent drop in difficulty reflects a decline in mining activity. This could be due to several factors, such as increasing energy costs, decreasing profitability, and miners’ migration. With global energy prices on the rise, mining can become a costly endeavor. Also, some miners may be moving their resources to other cryptocurrencies, as a result of the reduction in incentives following the recent halving event.

What’s Next for Miners

However, the lower difficulty should make it easier for existing miners to discover new blocks. This could incentivize some miners to return to the Bitcoin network, potentially bringing the hash rate back up. According to an earlier report from TheCoinRise, the Bitcoin network recently processed its one billionth transaction since its inception 15 years ago.

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