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After Tesla’s recent U-turn, the price of Bitcoin was hit hard, and the difficulty of Bitcoin mining jumped by $25 trillion, the highest level seen during the existence of the agreement. The spike in mining difficulty comes after a recent 12% drop in difficulty experienced by the network two weeks ago.
After a problem with China’s Xinjiang power grid three weeks ago, the overall SHA256 hash rate used by the Bitcoin (BTC) network dropped significantly. When the hash rate decreases, this in turn causes the mining difficulty of the BTC network to drop by 12.6%.
Essentially, BTC mining difficulty is a measure of how difficult it is to find a hash value below a given target. The stronger the hash power, the greater the difficulty, and when the hash rate decreases, the difficulty will also decrease. Satoshi Nakamoto’s carefully designed difficulty system aims to maintain balance within the mining system and maintain a fairly consistent 10-minute interval.
On Wednesday, BTC’s mining difficulty jumped to 25.05 trillion, the highest difficulty ever. This means it is more difficult than ever to find a Bitcoin block and receive coin library rewards and fees.
Since its issuance in China, the hash rate of BTC has been much higher, and on May 9, 2021, it stole 214 exahash (EH/s) per second. However, as the difficulty increased and Tesla announced a price drop, the hash rate also dropped.
At the time of writing, according to daily on-chain statistics, the hash rate of the Bitcoin network is approximately 170 to 180 exahash per second. In addition, if the hash rate is maintained at the current level within 13 days, another increase may occur. In less than two weeks, the network difficulty of BTC may jump to 30.30 trillion US dollars.
Nonetheless, with the current BTC price and the $25.05 trillion difficulty jump, most ASIC mining equipment can still be profitable at a price of $0.12 per kilowatt hour (kWh). Using the current difficulty index and USD 0.12 per kilowatt hour, a 100 terahash ASIC mining equipment can still earn USD 30 to USD 40 per day.
On May 13, 2021, about 18 mining pools dedicated the hash rate to the BTC chain. Interestingly, F2pool has been the top mining business with the highest hash rate for several months, but Antpool has recently taken the lead.
At the time of writing, Poolin follows Antpool, and F2pool is now the third largest mining pool on Thursday afternoon. Bitcoin supporters and investors will pay close attention to the hash rate and the difficulty of mining, because many people believe that the hash rate follows the price of BTC and vice versa.
What do you think of the recent spike in mining difficulty on Wednesday? Let us know your thoughts on this topic in the comments section below.
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