January 25, 2022

Bitcoin Mining Difficulty To Reduce Tomorrow

Bitcoin’s hash rate has experienced volatility of late, mirroring the volatility closely of the spot price market of the cryptocurrency. The hash rate of Bitcoin had come close to the 180 EH/s level on Wednesday; the hash rate, however, fell from this peak yesterday. It dropped from almost 180 EH/s to 128 EH/s. 

Effect Of Hash Rate Drop

The recent dip comes just before the mining difficulty adjustment scheduled for tomorrow. The difficulty has gone nowhere but up since July. This Sunday will be the only time since that time in July that the difficulty will be reduced.

The dip in the price of Bitcoin seems to have affected the hash rate. Experts say the price drop has led to a decline in processing power as the month ends. Available information showed a week ago that the hash rate was pushing higher. The push higher was in line with a 90-day trend.

The hash rate today is around 168 EH/s, from Wednesday’s high of 178 EH/s. The hash rate dropped to 128 EH/s two days later, falling close to 30% within the period. The slump in the hash rate is forcing the network difficulty to remain low. The network change in difficulty coming tomorrow will be the only reduction after the second week of July, having seen nine straight increases.

The difficulty involved in mining Bitcoin has increased by over 50% from July. The difficulty is to drop by almost 0.4%. The change will not be the most significant, but it will be just enough to stop it from reaching its highest peak. Hash rate allocation across mining pools has also changed in recent times.

Bitmain’s Antpool is the world’s biggest Bitcoin mining pool, handling about 17% of the world’s Bitcoin mining operations presently. Its share of the total hash rate currently is just over 26 EH/s. Foundry USA, the second-largest Bitcoin mining pool, has over 16% of the global pool. It has a corresponding hash rate following today’s values of almost 26 EH/s. F2pool follows in third place with a share of over 15% and a hash rate of nearly 24 EH/s.

Bitcoins mining difficulty hit a new peak in May of this year at just over 25 trillion. The difficulty today is just over 22.65 trillion. The reduction tomorrow will bring the difficulty a little below 22.6 trillion. 

Environmental Fears Around Bitcoin Mining

Sweden recently published a letter to the EU outlining things they found worrisome about Bitcoin mining. The concerns have become even more pressing with the migration of miners due to China’s cryptocurrency ban. Recently, there have been suggestions from the local and regional development body of Norway that they were considering Sweden’s proposition of a Bitcoin Ban.

The reduction to take effect tomorrow may look small, but it will keep the difficulty down for about 14 days. The reduced difficulty will relieve Bitcoin miners, especially with the recent slump in Bitcoin prices. Bitcoin’s mining difficulty jumped almost 5% days after it attained its all-time high in October.