The Bitcoin mining difficulty has dropped by 15.95% since the last readjustment on March 9th, the second-largest fall in Bitcoin’s history. The latest readjustment happened today morning on block #622,944 leading to a new difficulty of 13.91 T down from its prior reading of 16.55 T.
A fall in difficulty is caused by a reduction in hashing power which means that fewer miners are being used to mine the bitcoin. The hash rate has fallen from 118.40 EH/s over the last couple of weeks to 99.59 EH/s reprinting an expected 15.89% fall.
Mining difficulty is measured automatically by the bitcoin software taking into account the amount of hash rate in the network. The higher the hash rate, the higher the mining difficulty will be needed to maintain a relatively even block creation time. Bitcoin has a 10-minute block creation time and to maintain this time, the mining difficulty will be readjusted according to the rise or fall of hash rate.
The hash rate also translates to the number of miners competing for the block rewards. If more miners join the race for block rewards, the hash rate will increase making it easier to mine bitcoins. The effect is that block time will be reduced necessitating the mining difficulty readjustment to maintain block creation time. This exercise happens every 2,016 blocks or roughly every two weeks.
It is interesting to note that the price of bitcoin has also fallen in the past three weeks following a market panic caused by the global Coronavirus epidemic. Depressed prices expectedly lead to fewer profits for the miners some of who may have been squeezed out.
Making things worse, the mining difficulty had positively readjusted on March 9th making it harder to mine. As more miners left the network, the block creation times rose as high as 11 minutes 54 seconds.
The price of bitcoin has corrected more than 55% in the last three weeks starting on March 7th with opening figures of about $9,100. On March 13th, barely a week later, the flagship cryptocurrency touching a yearly low of $3,850 according to data from Luxemburg-based Bitstamp. The coin went on to make a semi recovery back to $7,100 on the 20th, a level it has maintained for the most part in the past week.
With the fall of the mining difficulty and a rising Bitcoin price, we may be able to see a rise in the hash rate over the coming days and weeks and most of the miners that were shut off get back online.
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