- Bitcoin miner capitulation does not appear to be happening, with less than 10% network difficulty downward adjustment predicted
- The author of ‘Bitcoin and Black America’ says buying Bitcoin is a form of protest
As Bitcoin markets continue to toy with investors and speculators, Bitcoin network difficulty looks set for a third consecutive difficulty drop after the reward halving event on 12 May 2020. However, the drop in difficulty looks set to be less than 10%, meaning to say that it is slowing down, so fewer miners are dropping out. This suggests that miners are still able to remain profitable even with lowered rewards and the mining death spiral that some critics have been saying could happen, won’t happen after all.
Bitcoin network difficulty analysis based on BTC.com shows that the last difficult adjustment yesterday (-9.3%) means it is on course to repeat a pattern that has only happened twice before: three consecutive difficulty lowerings.
The next adjustment is predicted to be at -7%, which will actually still be far away from the record of eight back-to-back down downward adjustments that happened in 2011.
Why is this important? Difficulty is basically a measure of how many miners are contributing hash power to secure the Bitcoin network. As more miners enter, difficulty must go up to ensure that cryptographic puzzles are solved to an average of one block every 10 minutes. As miners leave, puzzles take longer to solve, so difficulty must adjust down to ensure that blocks are easier to find.So, taking it down incentivizes participation in Bitcoin transaction validation and network securing.
These automatic difficulty adjustments happen every 2016 blocks mined, roughly every two weeks during periods not close to halving. This helps Bitcoin to regulate itself without risking security.
3 weeks after the #Bitcoin halving the mempool is almost empty again, 1 sat transactions confirming.
No mining death spiral, even though we lost nearly 50% of the hashrate, it's bouncing back, next difficulty adjustment down less than 10%.
Bitcoin working like it was designed to. pic.twitter.com/UPEDPd3WwA— WhalePanda (@WhalePanda) May 31, 2020
The fact that miner revenues have been slashed 50% hasn’t had the fallout some predicted. Crypto influencer WhalePanda notes that everything is working as it should for Bitcoin, saying:
“3 weeks after the #Bitcoin halving the mempool is almost empty again, 1 sat transactions confirming. No mining death spiral, even though we lost nearly 50% of the hashrate, it’s bouncing back, next difficulty adjustment down less than 10%. Bitcoin working like it was designed to.”
While miners go strong, so are the protestors in the United States right now, and Bitcoin has been referenced even among the demonstrations against police brutality and racism, sparked off by the killing of black American George Floyd by police officers.
Isaiah Jackson, the author of ‘Bitcoin & Black America’, says that people who invoked Bitcoin during the protests have finally identified the “real enemy”, a broken financial system that has singled out African Americans for exclusion.
Jackson told Cointelegraph that he was supportive of photos shared on social media that showed signs carried aloft by protestors, promoting Bitcoin. He spoke of the tragic exlcusion of black people by the financial system, urging them to take up Bitcoin:
“When the economic system is broken … no matter how hard you try, you get pushed to areas where police oversight is very heavy. You get these clashes and police start killing black men and it’s all just a domino effect. So I think them holding signs is them saying, ‘Hey once this is over, remember who the real enemy is’.”
The author pointed out several systemic issues that needed addressing, such as the unlimited money printing by the US central bank and the unemployment crisis leaving 40 million Americans without jobs. He questioned the lack of strategy by the authorities and was happy that more and more people recognized the alternative in Bitcoin.
#Bitcoin is the peaceful protest.
— CZ ? Binance (@cz_binance) June 1, 2020
Jackson’s name and book title have made an appearance on several protester placards in the US and even in London. Even Binance CEO Changpeng Zhao has taken to Twitter to say:
“I usually say that that the most peaceful protest you can do is simply buying Bitcoin on a regular basis, because you’re just moving your money out of this system into what I believe is a better and hard money system that can be used in the future.”
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