Bitcoin's mining difficulty has just seen its largest percentage decline since the advent of ASIC mining machines in late 2012, dropping just over 16% to the delight of miners who will be able to celebrate as their yield is set to increase. significantly.
The second biggest drop of all time
The difficulty dropped to 16,787 trillion around 9:00 UTC on Tuesday, the lowest level since June, according to data collected by BTC.com. The new measurement marks the second largest percentage decrease of all time.
Mining difficulty is a relative measure of the amount of resources needed to compete for the mining of new bitcoins - which can then be traded with software such as Bitcoin Revolution. This parameter adjusts itself every approximately two weeks (or periods of 2.016 blocks) depending on whether the estimated total hash power consumed by the network has also increased or decreased.
The significant adjustment on Tuesday is likely due to the fact that many mining companies in China's Sichuan province are taking machines offline and moving to cheaper power sources after the rainy season ends in the region.
Over the next two weeks, until the next adjustment, miners with machines still online will enjoy a pleasant respite after battling an unusually tough year, which Thomas Heller, COO at mining software company HASHR8, described as “truly unique in its gender".
A significant turnaround
As the price of bitcoin has risen significantly in recent months and the amount of energy needed to mine new bitcoins has decreased, "the margins for efficient miners will increase significantly," explained John Lee Quigley, director of research at HASHR8. in a note published Monday.
Furthermore, “a myriad of bad miners will again be able to mine profitably,” he added. In short, from now until the next difficulty adjustment, mining bitcoin will be "extremely profitable" for miners, Quigley said.
Beyond the numbers, Tuesday's adjustment is also important as it marks a shift in a period with little frequency of negative adjustments. Generally, only 17% of adjustments are negative and even fewer - around 2% - are double-digit percentage decreases.
“What we're seeing now is really an anomaly,” Quigley said. "Higher prices almost always lead to greater difficulties." The machines transferred from Asian mining companies are expected to be back online in the coming weeks, and other miners could bring more machines online in the coming weeks to take advantage of the higher profit period, which could cause an increase in difficulty in the future.
The improved margins for miners during the hashrate drop are temporary, said Daniel Frumkin, engineer and technical writer at Slush Pool, the first bitcoin mining pool launched in 2010. "That said, no one will complain about higher margins for two or four weeks ”, he concluded.
