Bitcoin mining activities are on the road to complete recovery after the most severe short-term network interruption earlier in 2021, with miners finally receiving financial returns.
The on-chain analysis firm Glassnode claims in its Oct 4 Week on Chain report that the Bitcoin hash rate mostly recovered amidst 50% of the network’s hashing power that lost connection in May after China’s attacks on miners. Hash rate represents a Proof-of-Work network’s overall computing capacity.
The data from Glassnode implies that both mining difficulty and hash rate are continuously recovering and soon be at a more powerful level. Mining difficulty is the measurement of competition among miners who work on solving the network’s subsequent block. As per the reports from July, difficulty fell heavily by 28%.
Miners are recovering fast
With a 39% increase from late July, the mining difficulty for miners almost reverted to its pre-China exodus, with an extra rise this week expected. Glassnode further said that the difficulty ribbon had reported its most solid reversal this time since December 2018.
The difficulty of Bitcoin climbed by 4.71 percent at block level 703,584 on Oct 5, as recorded by the Chinese media platform Wu Blockchain. It is the sixth surge in a row since Jul 31.
Given the 50% decrease in block rewards from 12.5 BTC to 6.25 BTC in May 2020, mining profitability has grown dramatically since that time.
Glassnode noted that the present mining profits of $40 million per day climbed 275% over Bitcoin’s halving in May 2020. It has been up around 630% from the $6 million to $8 million lower of June 2020.
“The Bitcoin Block of Reward value continues to climb, creating market incentives to adapt, develop and recover, despite huge swings of the mining market, several deep price adjustments, and a halving event in May 2020,” the paper said.
Additionally, these Chinese FUD allow BTC to come back more strong like the 2017 case. WE can expect a big return in the fourth quarter of 2021.