Bitcoin has been having a bad day lately. In addition to the collapsed price with successive blows, now the mining difficulty has experienced the biggest decline in history.
China’s harsh attitudes and rhetoric towards cryptocurrencies and Bitcoin mining were one of the most important factors that hit the Bitcoin price. After the bans on cryptocurrency mining from China, there was a serious exit of miners from the country. The hash rate, which represents the total processing power on all devices used for BTC mining, has experienced a sharp decline. The hash rate, which was measured as 200 exahash in May, was pulled to the level of 66 and recovered a little to 90 levels. The decrease in the hash rate also caused a decrease in the number of blocks by almost half.
There is a balance mechanism in the Bitcoin network that is adjusted according to the hash rate change for two weeks. This mechanism is a mechanism that protects and controls itself according to the hash rate. This mechanism is called difficulty adjustment. Difficulty adjustment is made every 2016 blocks, so Bitcoin mining difficulty increases or decreases according to the hash rate change. The basic operation in Bitcoin is to produce 1 block every 10 minutes. The hash rate drops in the past days have increased the average block extraction time up to 14 minutes, and it has been seen that blocks cannot be produced even for more than 2 hours.
The difficulty adjustment was made once again today, with Bitcoin mining difficulty dropping by 28% at block 689472 to 14 trillion. However, the block times were relatively normal. This drop was recorded as the largest difficulty drop in history. The biggest drop before that was 18% in 2011.
What does reduced difficulty mean?
In the last period when Bitcoin mining was this easy, the BTC price was around 8-9 thousand dollars. The lower the difficulty, the higher the mining profitability. Since the increase in profitability will increase the interest in mining, the hash rate can also recover.