The largest drop in the difficulty of Bitcoin mining did not pass without a trace for the miners – for those who remained in the network, the profitability jumped to a new local maximum. At the same time, the very reduction in complexity was a consequence of the massive migration of Chinese miners out of the country after increased pressure from the local government.
As a result, the daily profitability of the cryptocurrency mining process has increased significantly.
By tradition, let’s start by explaining the situation. The difficulty score measures how easy it is to find a solution for a new block in a cryptocurrency network, add it to an existing blockchain, and be rewarded for it. The more miners appear on the network, the higher the difficulty becomes. Thus, blocks are created in approximately the same period of time, due to which the rate of emission of a cryptocurrency – that is, the rate of its release – remains normal, and inflation does not go beyond the designated limits.
On Saturday morning, the difficulty fell by 27.94 percent – from 19.93 T to 14.36 T. It is noteworthy that the average block time since the previous correction was 13 minutes 53 seconds instead of the normal 10 minutes. Therefore, it took not the usual two weeks to create 2016 blocks in the BTC network, after which the difficulty changes, but twenty days.
We checked the actual data: yesterday the block time in Bitcoin was 10.18 minutes, that is, the indicator returned to normal. At the same time, on June 28, the indicator was at a local maximum of 26 minutes.
Average block time plot on the Bitcoin network
And here is a graph of the difficulty of Bitcoin mining over the past three years. The fall is noticeable even on it.
Bitcoin mining difficulty chart
Note that the latest drop in mining difficulty by 28 percent did not become a record in the entire history of cryptocurrency. Shortly after the launch of the Bitcoin network in 2009, the figure changed more radically. However, then almost no one knew about the coin, so the current collapse of the indicator is deservedly considered the largest in the modern era of BTC.
In general, as the block time became shorter, it means that blocks began to be created faster. Well, this increased the profitability of miners, because, in fact, the reward is now counted more often. Here are the details of what is happening.
Bitcoin mining has become even more profitable
The scale of changes in a niche after changing network parameters is enormous. In particular, the day before the difficulty adjustment on Friday, daily mining income was about $ 20.7 million. A day later, it rose to $ 29.3 million, and by Tuesday of this week, to $ 31.9 million .
Accordingly, the mining of bitcoins in the context of the day has become more profitable up to 50 percent. The most recent result is the equivalent of $ 27.87 million on Wednesday July 7th.
Change in the average income of Bitcoin miners
All this is a consequence of «very interesting dynamics», experts of the analytical company Glassnode are sure. Here is a quote from company representatives, in which they share their attitude to what is happening. The replica is provided by Cointelegraph.
We have a very interesting dynamic where about 50 percent of the hash rate is currently disabled and involves a lot of logistics costs. At the same time, the remaining 50 percent were virtually left without competition.
That is, half of the miners have almost doubled their profits, while the other half – mainly from China – are only being spent on the move. This has never happened before in the history of cryptocurrency, even without taking into account the scale. For active miners, profitability has returned to roughly the levels seen when Bitcoin was still trading in the $ 60K region.
Despite this, the monthly income of Bitcoin miners is not showing the best results so far. Now for July it is $ 161.5 million. Even if we project this figure to 31 days in a month, we get 625 million, which is noticeably lower than the June result of 839 million.
Bitcoin mining monthly profitability chart
The drop in the indicator can be explained not only by the subsidence of the BTC rate, but also by the decreased activity of blockchain users. For example, now the number of transactions in the cryptocurrency network is close to the minimum for 2021. And since transfers are not carried out so actively, there is practically no reason for the load on the blockchain and the growth of commissions that are sent to miners.
Graph of the number of transactions in the Bitcoin network
We believe that over the past few days, the Bitcoin network has once again reminded of its power. It is able to withstand even the activity of the governments of the largest states, which clearly do not approve of the cryptocurrency. And if some of the miners leave the network, the complexity mechanism will bring the blockchain’s position back to normal and allow it to work further under normal conditions. This means that BTC may not be afraid of even a hypothetical situation in which most of the miners will leave the network.
