- Bitcoin mining difficulty fell by 7.32% for the first time since July 2021.
- Luxor hashprice shows a 20% fall in mining profitability over the past month.
- The computing power is split between 12 smaller mining pools and five larger ones.
The difficulty of mining a bitcoin block fell by 7.32% today, with miners powering off machines as a brutal bear market eats into profit. The adjustment at block height 766,080 is the most considerable downward shift since July 2021, as confirmed by BTC.com.
Following China’s ban on bitcoin, hordes of Chinese miners began shutting down operations at a time when China was the largest bitcoin mining hub.
To maintain a fairly constant time for mining a bitcoin block, the mining difficulty automatically varies by the hashrate or computing power measured online. Simply put, the difficulty increases in parallel to the number of miners.
The value of bitcoin has been frustratingly weak for several months, paired with ever-rising electricity costs, which has stunted miner profit margins considerably.
While Compute North filed for Chapter 11 bankruptcy, major producers like Core Scientific (CORZ) and Argo Blockchain (ARBK) are struggling with financial issues.
As long-term mining initiatives have been completed, the hash rate has increased even more as equipment efficiency improves rapidly.
An uptick of one-third was observed in both hashrate and difficulty between August and the last upward movement on November 21.
Meanwhile, the Luxor hashprice indicator shows a 20% decrease in mining profitability over the past month. Jaran Mellerud, an analyst at Luxor recently stated:
depressed profitability levels, even miners using energy-efficient machines like the Antminer S19j Pro need access to electricity priced lower than $0.08 per kWh,
On top of that, energy prices have increased in the last few days, along with the price of natural gas.
On the other hand, this latest decrease in hashrate and difficulty does not make the network more vulnerable to attack. According to data from BTC.com, the computing power is split between 12 smaller mining pools and five larger ones.
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