Bitcoin has just experienced its second-largest mining difficulty decrease in the cryptocurrency’s history, according to fresh data. Furthermore, this is the second consecutive drop in the premier cryptocurrency’s hashing algorithm difficulty.
The mining difficulty long kept on increasing despite a bearish market
This news comes from the Chinese mining pool BTC.com, which compiles information on the difficulty of Bitcoin’s hashrate. Although Bitcoin has experienced a prolonged price-slide since the beginning of the year, the mining difficulty has nonetheless increased.
Now, however, it would appear that the mining difficulty has taken a stumble. Bitcoin’s hashing difficulty algorithm is tweaked every two weeks in order to maintain a ”10-minute block time.”
The latest adjustment, however, saw the difficulty of the cryptocurrency drop by 15.13%. Moreover, this comes as the difficulty already slumped by 7.39% two weeks ago. This coincided with the start of the recent market-wide cryptocurrency price slide – the market’s entry into a ”crypto winter.”
Furthermore, it is worth noting that this drop is the second-largest in Bitcoin’s difficulty history. The single largest drop occurred on October 31 back in 2011. At the time, the premier cryptocurrency’s difficulty fell by 18 percent, whilst another difficulty correction in mid-October of 2011 constitutes the third largest drop.
Recent difficulty drop can be linked to price decrease
The most recent decrease in difficulty level, however, was preceded by a significant market adjustment. Currently, Bitcoin has lost more than a third of its price since November 14th.
Although the exact reason for the market plummet has not been agreed upon, potential culprits are bountiful. Observers have raised factors such as the Bitcoin Cash hard fork, uncertain traditional global markets, as well as increased regulatory pressure as potentially being the reasons behind the aforementioned drop.
Nevertheless, decreasing coin values and market panic is making cryptocurrency miners quit. According to Shixing Mao, the CEO of the China-based cryptocurrency mining pool F2Pool, mining profitability has taken a hit.
Mao argued that Bitcoin’s break-even point was somewhere between $3,891 and $11,581 – depending on the equipment being used. Bitcoin is currently trading at $3,987, meaning that it is close to the low end of this price-spectrum.
It can be assumed that the resignation of some cryptocurrency miners is intrinsically linked to the decrease in mining difficulty. It remains to be seen if Bitcoin experiences another drop in mining difficulty in another two weeks.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.