Bitcoin mining difficulty decreased by 7.32% today, while some miners have turned off their machines due to the low profitability of mining in recent months.
To Report CoinDesk, this periodic correction of difficulty that happened at block number 766,080 of the Bitcoin network is considered to be the largest decrease in the difficulty of the network since July 2021 (July 1400). In July of last year, a significant part of the miners were removed from the network due to the ban on digital currency mining in China. Until then, China was known as the largest Bitcoin mining center in the world.
According to the programming in the Bitcoin blockchain, the mining difficulty is adjusted periodically (approximately once every two weeks) in accordance with the overall hash rate (that is, it increases or decreases) until the time required to mine each block in the Bitcoin network is on average about Let it stand for 10 minutes. Therefore, the higher the number of active miners in the network, the more difficult the extraction will be, and on the contrary, with the decrease in the number of active miners, this rate will drop (under the influence of the drop in hash rate).
During the past few months, Bitcoin miners were facing a decrease in their income due to the low price of this digital currency on the one hand, and on the other hand, they were struggling with the increase in energy costs. Some of the major Bitcoin mining complexes, including Core Scientific and Argo Blockchain, are already facing financial problems, and worse than these two, Compute North has officially declared bankruptcy. .
With the delivery of new and more efficient mining devices to the farms and the growth of the hash rate affected by the increase in the number of active miners during the previous months, the low profitability of mining and its consequences intensified. In fact, between the beginning of August and the last increase in the difficulty rate on November 21, the mining difficulty and the overall hash rate of the network both grew by about 33%.
Now it seems that the digital currency winter has deeply affected the industry and some miners have been forced to shut down their machines. This trend is clearly seen from the decrease in the overall hash rate of the network since mid-November. However, hash rates are still higher than the levels we saw when the cryptocurrency mining ban began in China.
Hash price index or hash price marked in yellow in the chart above is the income that miners earn per unit of hash rate (for example, trahash per second) in a certain period of time (for example, a day). according to data The Luxor platform of this index has lost 20% in the last 30 days.
Jaran Mellerud, one of Luxor’s analysts, said that in the current turbulent situation, even miners who use efficient devices like “Antminer S19j Pro” are only profiting from their activity while the price they pay per kilowatt hour Electricity is less than $0.08. He says the average price paid per kilowatt hour of electricity on the Bitcoin network is $0.05, while many miners pay between $0.07 and $0.08 for the energy they need.
In addition, the price of electricity and gas has increased in some countries in the past few days.
Miners who buy electricity at the spot market price and were already operating close to breakeven (neither profit nor loss) may be at a loss as energy costs rise again.
It is worth noting that this recent drop in difficulty and hash rate is not going to make the Bitcoin network more vulnerable to possible attacks. In addition, the computing power of the network is divided between 5 large pools and 12 smaller pools.