Bitcoin mining difficulty drops by 9%, returning to January levels

On Thursday evening Beijing time, the Bitcoin blockchain lowered its mining difficulty by 9.29% at block height 633,024, the lowest level since January this year.

This is also the second time that the difficulty of Bitcoin mining has been reduced after the block reward was halved. Two weeks ago, the difficulty of mining was reduced by 6%. The reason for the difficulty adjustment is the continued decline in the network hash power. Last month's halving event eliminated some Bitcoin miners who could not make a profit due to inefficient mining machines.

A drop in mining difficulty means it will become easier to mine bitcoin, so miners with access to cheap electricity and more advanced equipment will see the adjustment as good news. The network hash rate continued to grow over the past week as Chinese miners began using new mining machines before the rainy season.

Since May, Bitmain and MicroBT, two major Chinese mining machine manufacturers, have released their latest ASIC mining machines, AntMiner S19 and WhatsMiner M30S, respectively. According to their official websites and major distributors, orders for these mining machines have been scheduled for three months. However, with the rebound in Bitcoin prices and the decline in hydropower prices in southwest China, some miners using older mining machines such as AntMiner S9s can still make a profit.

Bitcoin has emerged as an asset class over the past few months, thanks to its growing similarities to gold and its performance during the market crash sparked by the coronavirus pandemic, Bloomberg said in a report this month.

The report pointed out that Bitcoin experienced halving events in both 2020 and 2016. By comparing the price trends of the two years, Bloomberg believes that if the trend of 2016 is followed, Bitcoin will return to its historical high of $20,000 this year.

“We believe that the coronavirus is accelerating the maturity of the Bitcoin market relative to the stock and oil markets, supporting price appreciation for the cryptocurrency,” the report concluded. “Bitcoin’s ability to quickly rebound from the historic declines in stocks and oil suggests that its price fundamentals are very strong.”

Image source: pixabay

AuthorLiang Che

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