The level of difficulty in Bitcoin mining has increased for the second time after the slump in mid-July. The reason: the continuously recovering ecosystem.
The Bitcoin mining ecosystem is witnessing an increase in mining difficulty after China announced a crackdown on mining operations. Latest data from BTC.com show a Bitcoin mining difficulty dating back to June 17, 2021.
Since mid-June, the Bitcoin mining ecosystem has seen a 13.77% increase in difficulty in two consecutive jumps – to over 15 terahashes (TH). This is due to the fact that Bitcoin miners from China are now settling in various crypto-friendly countries.
The next adjustment is expected to occur on August 27 and the mining difficulty increases to about 15.63 TH.
Bitcoin’s mining difficulty peaked at 25TH before the tough crackdown on local mining activity in China. The unexpected decline in the number of miners in China has reduced the difficulty in confirming blocks. This has allowed the existing miners in the Bitcoin network to make more money.
Reason for Bitcoin Mining Difficulties in China
According to Statista, China’s exposure to mining Bitcoin (BTC) has dropped to 46%, unlike the United States. However, the country hosts almost 17% of the world’s mining hash rate. This suggests that it is recovering from the lull.
In a CNBC report, crypto analyst Jason Deane explains: The adjustment mechanism of the latest Bitcoin difficulty affects mining profit.
According to quantum economist Deane, this mechanism reduces mining profit by 7,3%. CNBC is an American news channel headquartered in Englewood Cliffs, New Jersey. The network is primarily focused on reporting on the US and international financial markets.
At the end of the discussion Mike Colyer explains:
“Machines of various kinds come from China, and they need a new home.”
Mike Colyer is the CEO of Foundry, a digital currency group based in New York. Colyer has concluded that the modern generation of Bitcoin mining rigs will be more efficient. It provides twice the power for an equivalent amount of electricity.
In addition, China’s rebellion against Bitcoin mining is based on energy concerns due to the power consumption by the mining operation.
After the tough crackdown, the countries of Kazakhstan, Russia, Canada and the United States became the best alternatives for Bitcoin miners.
Text credit: Bitcoinist
Last updated on August 16, 2021
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