Bitcoin’s mining difficulty has just recorded the largest percentage drop since the introduction of the ASIC miner in late 2012, dropping just over 16% and giving miners a reason to celebrate the profits of they are set to increase dramatically.
Difficulty drops to 16,787 trillion around 09:00 UTC on Tuesday, the lowest level since June, according to data compiled by BTC.com. The correction marks the second largest percentage drop of all time.
Mining difficulty is a relative measure of the amount of resources needed to compete to mine new bitcoins. It increases or decreases at the end of the roughly two-week period (or 2016 block period) depending on whether the total estimated hash power consumed by the network increases or decreases.
Tuesday’s significant correction comes as more miners in China’s Sichuan province are bringing machines offline and moving to cheaper energy sources after the end of the region’s rainy season, like CoinDesk previously reported.
Over the next two weeks until the next tuning, operators with the machine still online will enjoy a welcome break after battling an unusually tough year, which Thomas Heller, COO at public mining software company HASHR8, described as “truly unique”.
As the price of bitcoin has risen significantly over the past few months and the amount of electricity required to mine new bitcoins has decreased, “the margins for efficient miners will expand significantly,” said John Lee Quigley, director of research. At HASHR8, explained in a published note. Monday. Furthermore, “countless ineffective miners will be able to make profitable mining again,” he added.
In short, from now on to the next difficulty adjustment will be “extremely lucrative” for bitcoin miners, Quigley told CoinDesk in a direct message.
Outside of its size, Tuesday’s correction is also notable because of the infrequent frequency of negative corrections. Only 17% of the adjustment is negative, and even less – about 2% – is a two-digit percentage decrease.
“What we are seeing now is truly anomaly,” Quigley said. “Higher prices almost always lead to higher difficulties.”
The machines being relocated by miners in Asia are expected to resume operations in the next few weeks, furthermore, other miners may bring more machines online in the coming weeks to taking advantage of the time to increase profits, this may make it difficult to increase through the upcoming adjustment periods.
Daniel Frumkin, an engineer and technical writer at Slush Pool, the first bitcoin mining group launched by Braiins in 2010, says the improved margins for miners during a hashrate decline are temporary. time.
“That said, no one will complain about larger returns in two to four weeks,” he told CoinDesk.