Previously, Bitcoin's mining difficulty had plummeted after China announced its crackdown on mining operations. This proved so significant because miners in China contributed three quarters to the global hashrate. Now, as many of these miners have relocated and renewed operations, their contribution is once again raising mining difficulties.
Mining difficulty
Hashrate is the overall computing power on the network, to which miners contribute their skills in exchange for a fee. As the price of Bitcoin rises, it becomes more profitable to mine, which then incentivizes more miners to participate. To compensate for this additional capacity and remain competitive, proof-of-work protocols make it harder to mine a block and receive a higher reward the greater the hashpower available on the network. In this sense, greater Bitcoin mining difficulty represents greater overall hashpower provided by miners.
According to the most recent data, the recent spike in Bitcoin mining difficulty (quotation BTC) started on July 17th. Since then, the Bitcoin ecosystem has seen a 13,77% increase in mining difficulty in two consecutive leaps. The second managed to exceed 15 terahashs for the first time since mid-June. The next adjustment is scheduled for August 27, at which point the difficulty is expected to rise to 15,63 terahash. Before China began cracking down on local miners, Bitcoin's mining difficulty had peaked at 25 terahashs.
Cryptocurrency mining crackdown in China
After ordering financial entities to cut ties with cryptocurrency-related companies, Chinese authorities have started targeting cryptocurrency mining. As authorities began to shut down operations nationwide, domestic miners began fleeing overseas. This has led to a drastic drop in Bitcoin's overall hashrate.
While it previously contributed 3/4 of the global hashrate, China's contribution to Bitcoin mining has shrunk to nearly 46%, according to data from Statista. Canada, Kazakhstan, Russia and the United States have all recovered, with the latter hosting nearly 17% of the global mining hashrate.
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