Bitcoin falls 7.3% in difficulty, the most serious drop since China’s ban on cryptocurrency mining

Today, Bitcoin mining difficulty has been revised down by 7.3%. This makes it easier for miners to find bitcoins.

In this article, we’ll start with the numbers, and if you’re not sure what it all means, we’ll explain at the end.

Bitcoin fell 7.32%

Bitcoin difficulty is down 7.32%, according to data from BTC.com and CoinWarz. Over the year as a whole, the bearish correction was not that strong.

The last time Bitcoin mining difficulty dropped so drastically was in the summer of 2021, when China banned cryptocurrency mining. As a result, thousands of machines were shut down at once, seeking a place in the world where regulation and energy prices were cheap.

At the beginning of July 2021, the Bitcoin network registered a record withdrawal of 27.94%. Another fall of 4.81% followed. But when the miners found another home, the difficulty quickly recovered, with a total of ten consecutive climbs.

Energy is expensive while the price of bitcoin is low

It can be said that the more computer power miners use to mine bitcoins, the greater the difficulty becomes.

Difficulty reached an all-time high last month, so expect a dip. Especially since energy prices around the world are quite high and the price of Bitcoin is low. Mining costs a lot and the income is getting less and less. No wonder some miners are giving up.

In addition, new mining machines have also been released that are much more economical and energy-efficient than previous versions. As a miner, if you don’t have the resources to upgrade to the new machines, you’re already 1-0 behind. Many of these former miners are sold and end up in Russia.

Bitcoin miners guess numbers

Bitcoin difficulty, mining and economics are closely intertwined. The idea is that a new block is added to the blockchain every 10 minutes on average. This block is full of transactions and is good if users can be sure that a transaction does not take too long on average.

Each time a block is added, a game begins between miners who must guess a specific number (or less than that number). Can you guess the number? Then the miner can add a block to the blockchain and receive 6.25 BTC as a reward. But Bitcoin waits for no one and the next guessing game is about to begin.

Evaluation every two weeks

The more miners are added, the faster the target number is guessed. For example, in every block of 2016 it is checked whether the 10-minute average is still being achieved. Are blocks found faster? Then the network adjusts the difficulty upwards.

However, today it turned out that in the last blocks of 2016 it takes an average of 10 minutes and 48 seconds to add new blocks. This is too long, so the difficulty will be lowered.

Fun fact: if you multiply 10 minutes by blocks of 2016, you get about two weeks.

The computing power that all miners provide together is also called the hash rate. The difficulty is therefore a good indication of the development of the hash rate on the Bitcoin network. And the higher the hash rate, the more secure Bitcoin is.