By Alicia Maher
The BTC mining difficulty adjustment has dropped by about 1.5% for the first time in the last three months. The mining difficulty and hash rate hit peak levels after six successive positive difficulty adjustments.
Reducing Hash Rate
Over the past fourteen days, the average hash rate dropped to 198.10 exhashes per second (eh/s), while the average block time surpassed the 10-minute maximum by about 10 seconds. This drop in mining difficulty adjustment makes it easier for miners to resolve the next valid block.
Marginal drop in BTC mining difficulty after eight successive rises. Source: Glassnode
One of the most important features of the BTC network is its difficulty adjustment. This mining difficulty changes after every 2,016 confirmed blocks or every fourteen days. Whether this change is positive or negative will determine the ease or difficulty of mining blocks.
In the coin’s whitepaper, BTC founder, Satoshi Nakamoto, wrote that “the level of mining difficulty depends on the average number of blocks mined per hour. This difficulty increases for the quickly generated number of blocks.”
For perspective, it took an average of 10 minutes and 9 seconds to generate the last 2,016 blocks, indicating a slowness in the generation of these blocks. Hence, it is only logical that there is a decrease in the difficulty, and miners will find it easier to validate the next 2,016 blocks easier than they did with the last 2,016 blocks.
Hoping For The Best
Unfortunately, a popular BTC miner with the Twitter username (Denver bitcoin) claims that it is likely this -1.5% correction will be the only downward adjustment for this year. This 1.5% downward adjustment pales compared to the May-July 2021 period when there was a significant drop in BTC hash rate following China’s ban on crypto mining operations.
Bitcoin just had its first downward difficulty adjustment of 2022.
Will it be the only downward adjustment of the year?
Experts still calling for 300eh+ average by December.Fun times. pic.twitter.com/l3x8hNevaU
— 🏔Adam O🏔 (@denverbitcoin) March 3, 2022
But, the hash rate surged by over 30% as miners settled in crypto-friendly climes such as Canada and Kazhakstan, proving the strength of the BTC network. As tech giants such as intel make forays into the BTC mining sector, the competition is becoming stiffer, which may likely cause a reduction in the hash rate. According to Denver bitcoin, increasing resilience and geographic flexibility would likely make the expected 300 eh/s hash rate a reality before this year is over.
Decreasing BTC Mining Revenue
Over the past 30 days, there has been a 30% decline in total profitability from BTC mining. A Beincrypto survey revealed that the highest revenue for BTC miners within 24 hours for January 2022 was $60.16m. However, this amount decreased by nearly 17% last month, with the highest revenue for BTC miners within 24 hours for February 2022 being $50.23m
While there was also a decline in mining revenue for Ethereum miners last month compared to January, eth miners still earned more profits than BTC miners. Hence, it is no wonder that recent Beincrypto research showed that many miners now prefer to mine Ethereum even though BTC retains its status as the most popular and biggest crypto based on market cap.