The biggest reduction in BTC difficulty since 2021

 The biggest reduction in BTC difficulty since 2021

The Bitcoin BTC tickers down $16,994 ecosystem is still being impacted by challenging market conditions as mining difficulty declines by the largest margin since July 2021. 

The sharpest decline in difficulty in more than a year occurred on December 6 at block height 766,080, with a difficulty adjustment of 7.32 percent. According to data from BTC.com, this was concurrent with a decrease in average hashrate from 264.18 EH/s to 245.10 EH/s.

The difficulty of mining Bitcoin dynamically adjusts to the network's available hashing power, thereby capping the rate at which new blocks are added to the chain at an average of 10 minutes. 

Since the level changes every 2,016 blocks, the most recent decrease in difficulty will only continue for about two weeks. 

The change might be considered as a mercy for Bitcoin miners who had to deal with a turbulent 2022 that forced several small and major companies to close their doors.

As Cointelegraph previously reported, the third quarter of this year saw rising costs to generate fresh BTC along with a decline in the value of the leading cryptocurrency. Rising energy costs further reduced the profit margins of miners in the United States and Europe, forcing several operations to close. 

At the end of November, as a result of weak cryptocurrency market performance and higher computing demands, Bitcoin miners' revenue hit two-year lows. This finally resulted in some mining operations capitulating, which caused a recent decline in hash rates and caused the most recent difficulty change.

On December 3, bitcoin mining expert Jaran Mellerud tweeted his opinions, pointing out that the most recent reduction in hashrate is most likely caused by rising electricity prices: 

Many miners run at or below cash flow break-even, and if market circumstances deteriorate, they will be compelled to shut down their equipment. 

Mellerud also suggested that if the price of Bitcoin climbs through the end of the year, large increases in hashrate might be anticipated up to Q2 2023.

Article Credit: Cointelegraph

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