Bitcoin mining difficulty sees biggest drop since December 2022

Bitcoin network mining difficulty has experienced its biggest negative adjustment since December 2022, when the bear market was in full swing.

According to data from real-time Bitcoin dashboard Bitbo, mining difficulty fell 5.7% to 83.1 trillion on Thursday at block 842,688.

Bitcoin mining difficulty is negatively adjusted

Bitcoin mining difficulty measures how hard and time-consuming it is to produce a new block. The difficulty increases when the number of active miners increases and decreases when it decreases, making the mining process easier for other miners.

The mining difficulty is automatically adjusted after every 2,016 blocks, which is approximately every two weeks, to ensure that a new block is produced every 10 minutes on average, regardless of the number of active miners.

The last time Bitcoin witnessed a negative adjustment similar to the one it recorded today was 18 months ago, when the price of BTC stood at $17,000. At the time of writing, BTC was changing hands at $61,700.

Interestingly, crypto derivatives exchange Bitget reported two days ago that Bitcoin mining difficulty was set to see its biggest drop since the implosion of failed crypto exchange FTX. This was due to the 10% decrease in the hash rate of the Bitcoin network. However, Bitget said that on-chain data suggests that mining difficulty would plummet by just 4%.

In addition, Bitget said that the drop in mining difficulty may alter the balance between miners’ profitability and operating costs, indicating that financial dynamics are changing.

Miners face minor struggles

The latest adjustment in Bitcoin mining difficulty comes roughly three weeks after the end of the fourth quarter, which reduced miners’ block rewards from 6.25 BTC to 3.125 BTC. The adjustment may make mining blocks slightly easier than in the past two weeks, relieving miners of their post-halving struggles.

Before and after the halving, Bitcoin mining difficulty increased by 4% and 2%, respectively, reaching 88.1 trillion for the first time. These positive adjustments could be attributed to the hype surrounding the launch of the Runes protocol and miners increasing their hash rates in anticipation of the block reward cut. Notably, mining difficulty also increased by 8.2% in February to an all-time high of 81 trillion.

With Bitcoin’s falling hash rate, mining difficulty, and transaction fees, it remains to be seen how miners will navigate today’s crypto environment without taking the plunge.

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