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Bitcoin Network Posts Its Fourth Consecutive Downward Adjustment Of Mining Difficulty

Mining 2021/07/19 22:27 by Brenda Ngari
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It hasn’t been this easy to mine bitcoin and earn rewards since January 2020. Bitcoin’s mining difficulty, a measure that determines how hard it is to mine the flagship cryptocurrency, saw another drop over the weekend.

Another Bitcoin Mining Difficulty Drop

According to data provided by mining service provider BTC.com, difficulty plunged by 4.81% at block 691,488 on Sunday. This was the network’s fourth consecutive drop, having fallen by 16% on May 29. Further downward adjustments continued with a 5% decline on June 13 and a mammoth 28% drop on July 3. 

It’s worth mentioning that the bitcoin mining difficulty last fell four times in a row back in 2011. Even so, the negative adjustments have not had any noticeable impact on the BTC price action.

BTCUSD Chart By TradingView

Mining bitcoin has become downright difficult since China started tamping down on the industry in May, driving miners out of the country and crashing the network’s hash rate.

The bitcoin mining difficulty adjustment occurs every 2,016 blocks, or approximately every 14 days, as the bitcoin network is programmed to calculate how difficult it is to mine new coins and validate transactions so as to maintain a target block time of 10 minutes.

With the latest adjustment, the difficulty level now stands at 13.7 trillion — the lowest level since June 2020. Moreover, it is down almost 50% from the May 13 high of over 25 trillion.

The Bitcoin Blockchain Going Back To Normal After Latest Adjustment?

As aforementioned, the bitcoin hash rate has been plummeting as several local governments in China issue shutdown orders to miners. To understand the magnitude of this, the hash rate slumped to a two-year low of 59 EH/s on June 27. In July so far, however, the hash rate has recovered above 100 exahashes per second.

That said, the slight bounce is an indication that bitcoin miners are getting back online to take advantage of the lower difficulty amid their exodus to other countries such as the United States and Kazakhstan. 

The vice president of crypto mining infrastructure firm Foundry Services, Kevin Zhang, is suggesting that miners have survived the worst. According to him, both BTC hash rate and difficulty should return to normal from here.

“The hangover of a difficulty adjustment downwards from the China crackdowns should conclude after this adjustment. Expecting to see the hashrate and difficulty to slowly recover from here.”

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