Bitcoin mining has been more profitable than it has been in a long time
Bitcoin mining. (Image: Cryptographer / Shutterstock)
Good news for Bitcoin miners: The so-called mining difficulty, i.e. the degree of difficulty of prospecting, has plummeted by 28 percent. The reason is the crypto crackdown in China.
China has cracked down on Bitcoin mining projects in the past few weeks. Most recently, the authorities literally turned the power off to miners in Sichuan Province. Because more than half of the mining capacities were located in China, China’s actions also had an impact on the Bitcoin blockchain. The corresponding algorithm now responded by further reducing the mining difficulty.
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Hashrate dropped by 50 percent
The difficulty of prospecting collapsed by 28 percent on Saturday alone – the sharpest decline in the history of the largest cryptocurrency. At the end of May and mid-June, things had already gone down by 16 and five percent respectively. In step with the difficulty of Bitcoin mining, the hashrate also fell to 87.7 exahashes per second. For comparison: in mid-May the hashrate was around 180 exahashes per second. The hashrate was last up to date in December 2019.
The sharp decrease in mining difficulty, which is adjusted every 2,016 blocks or almost every two weeks, can be seen as a kind of self-healing mechanism of the Bitcoin blockchain. After the failure of a large part of the mining capacity due to the crypto crackdown in China, the lowering of the difficulty level will attract new miners, like Coindesk writes. The goal is to find a block in about ten minutes. At the end of June this period had swelled to 23 minutes.
As a result, according to experts, transaction prices have dropped from $ 10 to around $ 6. The hope of an increase in Bitcoin transactions and the increased attractiveness for miners has caused the Bitcoin price to rise by over $ 2,000 to around $ 35,500 since Saturday morning. In addition, crypto miners should benefit from the simpler conditions in the coming weeks. Bitcoin mining expert Brandon Arvanaghi speaks opposite CNBC of a “sales party” for miners that could last until the end of the year.
