Key Points
- Bitcoin mining difficulty has seen a significant drop of 5.7%, the largest in nearly 18 months.
- This negative adjustment follows a 10% decrease in network hash rate since the last difficulty adjustment on April 24.
The mining difficulty of Bitcoin (BTC) experienced a substantial decrease of 5.7% on Thursday. This marks the most significant reduction in almost a year and a half.
The adjustment occurred at block height 842,688, bringing the difficulty down to 83.1 trillion. This is the largest negative adjustment since Bitcoin was trading for around $17,000 during the bear market lows.
Understanding Bitcoin Mining Difficulty
The difficulty of Bitcoin mining is a measure of how challenging it is to mine a new block relative to the easiest possible scenario. It automatically adjusts every 2016 blocks, approximately every two weeks. This ensures that, on average, a new block is found every 10 minutes, regardless of the number of active miners.
When more miners are present, the difficulty of mining Bitcoin increases. Conversely, if fewer miners are competing to find new blocks, the protocol lowers the mining difficulty. This makes it easier for the remaining miners to discover blocks.
Hash Rate and Hash Price
This negative adjustment follows a 10% decrease in network hash rate since the last difficulty adjustment on April 24. The average block times were running at 10 minutes and 36 seconds before the adjustment.
The drop in hash rate led to the hash price of Bitcoin falling to an all-time low of less than $50 per PH/s per day on April 29. The hash price is a term referring to the expected value of 1 PH/s or 1 TH/s of hashing power per day. This metric quantifies how much a miner can expect to earn from a specific quantity of hash rate.
Today’s negative difficulty adjustment could alleviate some miners’ post-halving struggles, making it slightly easier to mine blocks than it has been for the past two weeks.
The recent Bitcoin mining difficulty adjustment is the first since a 1% drop at the end of March. It follows two positive adjustments surrounding the halving.
Bitcoin’s fourth halving event took place on April 20. The final difficulty adjustment pre-halving and the first post-halving rose 4% and 2%, respectively, reaching a record 88.1 trillion. This was accompanied by a hash rate peak of 650.29 EH/s on April 19. The network’s hash rate has fallen around 11% since the halving.
The final pre-halving adjustment rise occurred as Bitcoin miners seemed to be increasing their hash rate in anticipation of block subsidy rewards dropping from 6.25 BTC to 3.125 BTC.
The initial post-halving difficulty adjustment increase was attributed to the hype surrounding Runes, a new fungible token standard for Bitcoin launched at the halving. This initially helped to drive up transaction fee revenue for miners after the subsidy drop.
Transactions involving Runes generated over $135 million in fees in the week following the launch. However, after the initial hype, average transaction fees dropped considerably from a record high of $128.45 on the day of halving to around $1.
