As a researcher with a background in cryptocurrency and mining, I find the recent decline in Bitcoin’s mining difficulty intriguing. The 5% drop to 79.50 terahashes is significant, marking the lowest level this quarter and the largest decrease since March. This comes after a period of consistent growth, with the network hitting an all-time high of 88.10 terahashes in May.
As a researcher studying the cryptocurrency market, I’ve noticed an intriguing development regarding Bitcoin‘s mining difficulty. Specifically on July 5, there was a significant decrease of more than 5%, bringing the level down to approximately 79.50 terahashes per second (79.5T). This marks the lowest value for this quarter and the largest decline since March when the difficulty dipped below the 80 terahash mark (80T) momentarily.
As an analyst, I’ve observed a noteworthy decline in the network’s hash rate following its all-time high of 88.10 terahashes reached between March and May. Since then, there has been a steady downtrend.
What is Mining Difficulty
As an analyst, I would describe mining difficulty as a metric that indicates the amount of computational power needed to add new Bitcoin transactions to the blockchain and create new coins. This figure is adjusted approximately every two weeks to ensure a stable block time. Historically, the network’s hashrate, which represents the total computing power dedicated to mining Bitcoin, has experienced steady growth with only occasional exceptions.
In the year 2014, the hashrate for mining Bitcoin was approximately 1.1 gigahashes per second. This meant that most desktop computers could generate a profit by engaging in Bitcoin mining. However, as adoption grew significantly towards the end of 2017, the hashrate surpassed the terahash mark for the first time. In simpler terms, it became much more challenging for an average desktop computer to mine Bitcoin profitably due to the significant increase in the amount of computational power required.
Based on F2Pool’s calculations, ASIC mining rigs that consume no more than 26 watts per terahash while operating under the current Bitcoin difficulty of 79.5 terahashes can still turn a profit if Bitcoin’s value hovers above $54,000 and electricity expenses amount to $0.07 per kilowatt-hour.
Today, the Bitcoin mining difficulty underwent a 5% decrease, reaching a level of 79.50 T. In the present epoch, let’s examine potential profits for various price points using the table below:
— f2pool 🐟 (@f2pool_official) July 5, 2024
In simpler terms, a recent reduction in the mining difficulty for Bitcoin could temporarily boost profits for some mining businesses. However, if the price of Bitcoin falls, only the most efficient mining rigs will continue to make a profit. Larger mining operations, which often benefit from energy subsidies, are better equipped to handle price changes.
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2024-07-07 04:53