Bitcoin mining difficulty drops for the first time this year

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Bitcoin mining difficulty drops for the first time this year

For the first time since November 2021, the Bitcoin (BTC) mining difficulty adjustment has dropped, correcting 1.49%. The move follows a succession of 6 consecutive positive difficulty adjustments, in which the mining difficulty and hash rate hit all-time highs. 

The average hashrate over the past two weeks fell to 197.19 exahashes per second (EH/s), and the average block time exceeded the 10-minute target, at 10 minutes 09 seconds. As a result of the difficulty adjustment, miners competing to solve the next valid block find it marginally easier.

Bitcoin mining difficulty marginally dropping after an 8 month climb. Source: Glassnode

The difficulty adjustment is one of the Bitcoin protocol’s most prominent features. Every two weeks or 2,016 confirmed blocks the difficulty for mining a new block “adjusts” based on the average of the past 2,016 blocks, making it easier or more difficult to mine blocks.

From the Bitcoin whitepaper, Satoshi Nakamoto wrote, “the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they’re generated too fast, the difficulty increases.”

By inference, over the past 2,016 blocks, blocks were generated too slowly – an average of 10 minutes, 09 seconds. As a result, the difficulty adjustment automatically decreases and miners will hence forth find it marginally easier to solve valid blocks over the next 2,016 blocks.

According to Denver Bitcoin, a well-known Bitcoin miner, the -1.49% correction could be on the only one for the year.

Related: New York Bitcoin mining moratorium bill garners more support

A correction of 1.49% dwindles in comparison to the mining dark ages of May to July of 2021 when a ban on Bitcoin mining in China caused a catastrophic drop in the hash rate. However, it swiftly climbed up over the course of 2021, surging by 31% as countries like Kazakhstan and Canada picked up the slack proving the network’s resilience.

The Bitcoin mining industry is increasingly competitive, with tech industry players including Intel keen to make a dent in the hash rate and introduce their own miners. As Denver Bitcoin alluded, the 300 eh/s hash rate could be an attainable goal in 2022 particularly as mining shows growing resilience and geographic flexibility.