As a result of another recalculation, the difficulty of Bitcoin mining decreased by 4.81%, to 13.67 trillion hashes (T), according to BTC.com. This is the minimum since January 2020. Since mid-May, when the difficulty of mining the first cryptocurrency reached a historic high of 25.05 T, the fall was even more dramatic – by 45%.
According to the forecast of BTC.com, the decline will stop, and on the next recalculation, the indicator will turn out to be slightly positive. The gain could be more significant if the hash rate continues to recover to the May highs.
The difficulty of the network determines the amount of computing power required to find a new block in the Bitcoin blockchain. This parameter changes every 2016 blocks or approximately every two weeks. This is necessary to maintain a block dwell time of about 10 minutes.
After recalculating on July 3, Bitcoin mining difficulty fell by a record 28%. The last decrease in the indicator, which occurred on July 18, was the fourth in the series. The first happened on May 29 and amounted to 16%, the second – on June 14 by 5.3%. Last time, mining difficulty dropped four times in a row, and more than ten years ago. The last time such a long negative trend was observed was in 2011.
The decrease in the difficulty of mining comes against the backdrop of a ban on this activity in China. To date, about 90% of mining companies in the country have stopped working. Four provinces in China banned cryptocurrency mining entirely in June, and Anhui joined them in July.
Interestingly, the reduction in mining difficulty also means that Bitcoin miners will have a lot more money that remain online. Speaking to CNBC during the latest difficulty adjustment, Bitcoin mining engineer Brandon Arvanaghi told CNBC.
Bitcoin hashrate is growing
The drop in hashrate began in May after power outages in China’s Sichuan province. The decrease in the indicator continued in June against the background of repressions against mining in the country.
Although according to the Cambridge Center for Alternative Finance (CCAF), this happened even before the start of the persecution of the industry in the country – already in March, China accounted for less than 50% of the total bitcoin hash rate.
However, at the moment, the hash rate is growing again. After falling below 90 million TH / s two weeks ago. From the lowest level on July 3, Bitcoin hashrate at the time of publication was 100 million TH / s.
This shows that some of the mining machines moved over the last few weeks from China overseas are back online. Governments across North America and Europe are pushing for strong incentives from miners, and the crypto mining industry is moving towards green and sustainable energy solutions. But the price of Bitcoin has been under pressure over the past week, especially after it plunged below $ 33,000. At press time, BTC is training at around $ 30,600 with a market cap of $ 598 billion. An indicator to watch out for is Bitcoin address activity, which has plummeted over the past few weeks.