Bitcoin hashrate tends to go up from now on
Bitcoin mining difficulty has definitely increased, with associated drops in hashrate and profitability, but tweaking the algorithm doesn’t alarm miners.
According to reports, the difficulty of mining Bitcoin appears to have increased, reaching 7.3% this morning. This number is updated every 2016 blocks (approximately every 2 weeks).
However, this increase in difficulty does not seem to alarm miners, who are aware of the consequences of China’s enforced ban on cryptocurrencies and mining issued last spring.
In fact, considering that China alone accounted for 54% of the total Bitcoin hashrate and had to go offline, it’s reasonable to think that the return of the miners wouldn’t be a piece of cake. With all this, the Bitcoin network has not lost its pace.
In this regard, engineer Brandon Arvanaghi stated:
“There was no downtime for the Bitcoin network. That’s really the smartest part of the Bitcoin software: the difficulty setting.”
Furthermore, the redistribution of hashrate, previously concentrated in China, appears to have redistributed profitability. Here’s how Jason Deane, analyst at Quantum Economics crypto consultancy, describes it:
“Hashrate levels are still 42.1% below the peak in May 2021, when the Chinese exodus took place. This hashrate deficit means that those who are connected to the Bitcoin network are now earning money.”
Miners’ Resilience Despite Bitcoin Mining Difficulty
The likelihood that many miners who were in China have moved elsewhere can be described as an act of resilience against the new difficulty imposed on Bitcoin mining.
Indeed, despite the declines in total profitability seen compared to the period before the ban, miners continue to profit much more now than before.
This was only possible due to the Bitcoin algorithm’s self-correction which, as early as July 2021, had seen a decrease in difficulty compared to previous periods.
In that sense, if the energy cost and hashrate remain unchanged, the calculation for mining Bitcoin should remain as simple as it was in the beginning.
In this regard, Mike Colyer, CEO of cryptocurrency company Foundry said:
“We saw the bottom of the hashrate decline, and you can only go up from here. This next adjustment reflects the fact that miners are building capacity and installing new machines. There are a huge amount of machines coming out of China that need to find new homes.”