The flood season is delayed for a month, and the difficulty of Bitcoin mining has risen to a record high

This article is from Coindesk, original author: Wolfie Zhao

Odaily Planet Daily Translator | Moni

Bitcoin mining difficulty, an indicator that measures the difficulty of obtaining rewards for mining the world's largest cryptocurrency by market value, has recently reached a new all-time high of 7.93 T as Bitcoin prices rise again, 7% higher than the record of 7.45 T set during the recent two-week adjustment period, and the highest level since October 2018.

Based on the computing power deployed on the network, Bitcoin adjusts its mining difficulty every 2016 blocks (about 14 days). This is done to ensure that the block production interval in the next cycle can remain constant at about 10 minutes. When there are not too many mining devices to verify transactions to obtain Bitcoin rewards, the mining difficulty will decrease, and when there are more mining devices in the network, the mining difficulty will increase. The following figure is a trend chart of Bitcoin mining difficulty from BTC.com:

It is clear that more and more Bitcoin mining machines are buzzing now. According to data from mining pool operator BTC.com, the average computing power of Bitcoin miners around the world has reached 56.77 EH/s in the past 14 days, and everyone is mining "crazily".

Data from BTC.com further shows that the average Bitcoin mining power in the first 24 hours at the time of writing this article reached 59.58 EH/s, and the 3-day average mining power was 59.70 EH/s, which is higher than the average power of 56.77 EH/s from May 15th to June 27th.

Similarly, data from Blockchain.info also shows that as of June 22, the total Bitcoin network computing power has reached 66 EH/s, surpassing last year's record of 61.86 EH/s. The cryptocurrency market entered a long bear market last year, and the total network computing power dropped to a "pitiful" 31 EH/s in December 2018, but has now more than doubled.

Assuming that all the recent new computing power comes from commonly used mining equipment on the market - such as the AntMiner S9 with a computing power of about 14 TH/s, it means that at least more than 2 million mining machines have been deployed in the market in the past few months (1EH/s equals 1 million TH/s).

The increase in mining capacity is in line with the rise in Bitcoin prices in the first half of the year. This market trend has also caused the price of domestic second-hand mining machines to double, while also stimulating demand for new mining machines.

BTC.com further estimates that at the start of the next adjustment cycle, Bitcoin mining difficulty is expected to increase by another 7%. If this is true, it means that Bitcoin mining difficulty will cross the 8T "threshold" for the first time.

The flood season is one month late

The main factor for the increase in computing power comes from domestic Bitcoin mines. Especially with the arrival of summer, Bitcoin mines in the southwest region have deployed a large number of mining equipment.

According to a report released by blockchain research company Coinshare, as of the beginning of this month, 50% of the world's Bitcoin computing power comes from Sichuan Province. However, it is worth noting that the arrival of the rainy season in southwest China was delayed by nearly a month compared with previous years, resulting in some local mines running less than half of their mining equipment in the past month.

Xun Zheng, CEO of Bitcoin mining giant Hashage, has deployed multiple mining farms in the southwestern provinces of China, but he revealed that there has been no rainfall in the region for more than 20 days since the beginning of May, which is very unusual. He said:

"In the past few years, the southwest region of the country usually starts to have rain in May and lasts for more than a month, so the local hydropower stations usually have enough water resources before the beginning of June."

Although Xun Zheng's company can accommodate more than 200,000 ASIC mining machines, it only operated 40% of its capacity in early June this year. Fortunately, starting from the past two weeks, rain has once again fallen in the southwest of China. With the delayed arrival of the flood season, Hashage's mining capacity ratio has also climbed to more than 60%.

Previously, many domestic mining farms estimated that the total Bitcoin network computing power would exceed the 70EH/s mark during the peak of the rainy season around August this year, which means that if the mining equipment is AntMiner S9 or similar equipment, at least another 300,000 mining equipment can be activated.

In addition, some new entrants are also looking forward to the arrival of the flood season, such as Shanghai-based Fundamental Labs. This blockchain fund company has previously invested $44 million in purchasing top-level mining equipment and is expected to start mining in June.