Bitcoin on Thursday reached its 633024th block in its chain that resulted in the difficulty of its mining from 15.14 to 13.73TT. This is the 4th down from 2020 and the 2nd since its halving on May 11.
The difficulty of mining Bitcoin adjusts every 2016 blocks which is usually around two weeks to create a balance between global hashrate and the production of blocks on the network. This is required to keep the 10 minutes time average duration after which a block is created.
History of Bitcoin mining difficulty since July 2019 – Source: Glassnode
A rise in this measure means that BTC has become more difficult to mine. This results show that the computing power has increased considerably, resulting in a shorter time between the creations of consecutive blocks.
Conversely a decline could mean the reduction or complete cessation of the activities of certain mining companies during the time period.
According to data from Blockchain.com, Bitcoin hashrate increased from 121,000,000 terahashs per second (TH/s) to 90,293,000 TH/s the day after the halving.
This was evidently caused by the exit of less profitable miners from the mining pool, since halving entailed the reduction of rewards from 12.5btc per block mined to 6.25 units.
Evolution of Bitcoin hashrate over the past 30 days – source: Blockchain.com
The last two adjustments were therefore necessary to attract new investors to the sector and bring some economic health to it.
According to the words of Sasha Fleyshman , a trader from the American Stock Exchange Arca, the recent decline will have a greater impact than the previous one (6% decrease), because the manufacturers remaining in the market have more efficient equipment.
He also calls the period that follows the “modern ASIC era” of Bitcoin mining. This impliers that top mining companies have replaced their old supercomputers with newer energy efficient equipments.