- Bitcoin mining difficulty saw a record drop of 5.7% on Thursday, marking the largest negative adjustment in about 18 months.
- This recent adjustment is the largest decrease seen since December 2022, when Bitcoin was trading around $17,000.
- According to Bitbo data, the difficulty adjustment came at a block height of 842,688 and dropped to 83.1 trillion.
Bitcoin mining sees a record drop in difficulty, marking the largest negative adjustment in 18 months. What does this mean for the crypto market?
Record Drop in Bitcoin Mining Difficulty
Bitcoin mining difficulty is a relative measure of how hard it is to find a new block compared to the easiest it can ever be. It is adjusted automatically every 2016 blocks (approximately every two weeks) to ensure that a new block is found on average every 10 minutes, regardless of the number of miners active. When there is an increase in the number of miners, the difficulty of Bitcoin mining increases. Conversely, if there is a decrease in the number of miners competing to find new blocks, the protocol lowers the mining difficulty, making it easier for the remaining miners to discover blocks.
Drop Coincides with BTC Price Decline
According to the data dashboard, the negative difficulty adjustment followed a 10% drop in the network hash rate since the last difficulty adjustment on April 24. The seven-day moving average fell from 639.58 EH/s to 578.74 EH/s as of yesterday. Before the adjustment, average block times were occurring at 10 minutes 36 seconds. The drop in the hash rate caused Bitcoin’s hash price to fall below $50 per daily PH/s (or $0.05 per daily TH/s) on April 29, marking an all-time low. In addition, the price of Bitcoin also fell below the $63,000 level. According to the latest data, Bitcoin is currently trading at around $61,300.
Bitcoin’s Difficulty Level Drops After Consecutive Increases
As you have been following on CoinOtag, Bitcoin performed its fourth halving event in April. Today’s negative mining difficulty adjustment is the first adjustment after the halving. The last difficulty adjustment before the halving and the first difficulty adjustment after the halving increased by 4% and 2% respectively, reaching a record of 88.1 trillion. Also, a hash rate peak of 650.29 EH/s was reached on April 19. The network’s hash rate has fallen by about 11% since the halving. These adjustments were aimed at increasing hash rates in preparation for the decrease in block subsidy rewards. According to an analysis by Bitcoin researcher Mempool after the halving event, the revenue miners derived from transaction fees reached a record level after the subsidy reduction.
Conclusion
The record drop in Bitcoin mining difficulty is a significant development in the crypto market. It reflects changes in the mining landscape and can have implications for Bitcoin’s price and the overall health of the network. As the crypto market continues to evolve, such adjustments will be crucial in maintaining the balance between miners and the network’s operational efficiency.
