Has the difficulty adjustment mechanism failed due to the halving delay caused by the decline in computing power?

Since March this year, Bitcoin's total network computing power has dropped by 32%.

According to Viabtc data, the total computing power of the Bitcoin network exceeded 123.9EH/S on March 1 this year, and on March 23, this figure dropped to 83.8EH/S.

Bitcoin network computing power, source: Viabtc

Due to the continued decline in Bitcoin computing power, the Bitcoin block reward halving has been postponed for 3 days, and it is currently shown that the halving will be in 49 days.

Didn’t they say that “Bitcoin will dynamically adjust the mining difficulty to ensure that the block reward is halved every four years”? Why is it delayed?

Today, let’s find out.

In the article "What does Bitcoin's 'four-year halving' mean?", Plain Language Blockchain introduced to everyone: After every 210,000 blocks of Bitcoin, the block reward is halved.

Assuming that Bitcoin produces one block every 10 minutes and 6 blocks per hour, it will take about 4 years to produce 210,000 blocks. Therefore, there is a saying that Bitcoin will be halved every four years.

210000÷(365246)≈4

So, how does Bitcoin ensure that there is an average of one block every 10 minutes? Did the mechanism for dynamically adjusting the mining difficulty fail, causing the Bitcoin halving to be delayed?

Actually not. The main reason is that Bitcoin’s difficulty adjustment mechanism has a lag.

The difficulty is adjusted dynamically not every block, but once a cycle.

How long is one cycle? 2016 blocks.

That is to say, Bitcoin adjusts its difficulty coefficient every 2016 blocks. If we still calculate based on an average of one block every 10 minutes and an average of 6 blocks per hour, Bitcoin adjusts its difficulty coefficient approximately every 14 days.

Bitcoin's recent difficulty coefficient, source: CoinWarz

So, how does Bitcoin adjust the mining difficulty coefficient?

It is mainly done by comparing the actual generation time of the previous 2016 blocks. If the actual generation time is less than 20160 minutes (i.e. the expected value of one block every 10 minutes), the difficulty is reduced proportionally; if it is greater than 20160 minutes, the difficulty is increased proportionally.

The formula is as follows:

New difficulty coefficient = current difficulty coefficient * (actual block time of the previous 2016 blocks ÷ 20160 minutes)

In order to prevent the difficulty coefficient of Bitcoin from changing too quickly, there is a range for the difficulty adjustment in each cycle. Assuming the current difficulty is 100%, the next difficulty coefficient cannot exceed the range of 25% to 400%.

According to statistics from the btc.com website, the current difficulty of Bitcoin is about 16.55 T. There are about 7 days left before the next difficulty adjustment, and the difficulty is expected to drop by 14.28%.

Data source: btc.com

Since the difficulty coefficient of Bitcoin is adjusted once a period, and the changes in the computing power of the entire network are real-time, this adjustment has a certain lag.

If the computing power of the entire network continues to decline rapidly (such as now), the time of block reward halving will be postponed; if the computing power of the entire network continues to grow rapidly, the time of block reward halving may be advanced.

This is why data shows that the block reward halving will be delayed.

Are you still looking forward to the Bitcoin block reward halving? Feel free to share your views in the comment section.