The Bitcoin Network witnessed a 27.94% drop in the mining difficulty
- Why the sudden drop?
- What are its implications?
- What lies ahead for miners and mining businesses?
Bitcoin network has seen the biggest ever drop in its difficulty adjustment today. The difficulty has changed from 19.93 T to 14.36 T at block 689,472, a staggering 27.94% decline in processing power requirement for block discovery.
Bitcoin network algorithm is programmed to self-adjust the difficulty to keep its average target time around 10 minutes to mine a block. Mining difficulty adjustment occurs whenever 2016 blocks have mined to the network. It is the measure of how difficult it is to mine a new block in the network. The difficulty is proportionate to the time taken to find the correct hash for each block. Adjustment of difficulty depends on the average time and hash power for every 2016 blocks of the mining network.
The average time at block 689472, when the difficulty adjustment took place, was around 14 minutes. The increase in target time is due to the drastic fall in hashrate from 180.666m TH/s on May 14, 2021, to 87.621m TH/s as of July 2, 2021, following China’s Bitcoin crackdown. This 50% decrease in hashrate accounted for the increment in the target time.
The latest 27.94% decline in difficulty would bring down the block mining time close to 10 minutes. This decline in difficulty benefits the miners who currently operate. They will generate more profit until the Great mining migration gets completed and their hash power comes back online.
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