How is this trend affecting Bitcoin’s mining
The Chinese mining crackdown earlier this year left a deep mark on the Bitcoin industry and network, causing its mining difficulty and hash rate to take a deep dive. As China had contributed to 2/3rds of the network’s total hash rate till then, the miner exodus cause hash rates to remain alarmingly low since then.
However, the latest data suggests that a continued spike in Bitcoin’s mining difficulty is now getting readjusted. A continued spike in the difficulty can be noticed since 17 July, which has consecutively led to a 13.77% increase in mining difficulty in two consecutive jumps.
Earlier today, the network registered a 7.3% difficulty increase to 15.56 Tera Hash, for the first time since the second week of June. A 6% spike had been noted in the difficulty two weeks back as well, which was the first upward adjustment that had taken place since the crackdown.
However, this recent adjustment is significant as it was the largest that has been seen in the past 89 days.
This increase in difficulty comes right after 4 consecutive drops, two of which were very significant. On 3 July, the network registered a historic drop of nearly 28%, which was earlier preceded by a drop of nearly 16%.
Every two weeks or after every 2016 blocks, the mining difficulty of Bitcoin gets readjusted to maintain the normal 10-minute block time. Bitcoin’s mining difficulty peaked at 25 T before the Chinese mining shutdown. While the miners that had remained on the network made lucrative gains in the face of decreased competition and hash rate, this recent trend reversal in mining difficulty indicates that the competition is getting readjusted as well.
Mining data shows that while China’s contribution to the network’s hash rate has dropped down below half, the USA has been swift to pick up the pieces, which now hosts almost 17% of the global hash rate.
While it has now become markedly less profitable to mine BTC, this recent algorithmic readjustment is a positive sign for the Bitcoin community. As miners resettle in more crypto-friendly and energy-efficient neighborhoods, hash power is expected to keep on increasing in the coming months.