Bitcoin mining difficulty reportedly witnessed a significant drop on Tuesday, December 6th. The difficulty dropped over 7% which made many miners involved in the operations leaving the ground amidst the ongoing crypto winter. It is becoming difficult for miners to sustain in such a harsh bearish market.
Crypto Winter is Culprit of BTC Mining Difficulty Drop
According to mining pool BTC.com, the recent adjustment took place at block height 766,080 which showcased a change of 7.32%. The drop is said to be the biggest change in the difficulty since July last year. Crypto winter is the potential reason behind this year’s difficulty drop.
Earlier TheCoinRepublic reported that the difficulty of bitcoin mining update expected to witness its largest drop this year. It was also estimated to come by early Tuesday and said to stay between 7% to 8%. Different firms came up with distinct estimates including Luxor, Brains and Bitrawr projecting 7.98%, 7.9% and between 7.9% to 7.5% drop in difficulty.
Such a drop in bitcoin difficulty mining came up in July 2021 when China brought complete ban on crypto and related activities. The measure went on to impact the mining industry as well given that by the time the country was having a majority of bitcoin miners.
Along with the difficulty, the mining profitability also took a slump of about 20% in the past month. This does not come as a good indication for crypto mining companies. For several months now, such companies were struggling to keep the operations continuing amidst the declining bitcoin (BTC) price and higher energy prices.
Crypto Miners Compelled to Leave the Ground
Major players within the space have reported to find themselves stuck in embattling situations. Biggest crypto miner in terms of hash rate, Core Scientific have earlier indicated to file for bankruptcy. Argo Blockchain also reported to face liquidity issues. Moreover, Compute North has filed for bankruptcy under the Chapter 11 bankruptcy code.
Crypto winter has been affecting the broader crypto market and now seems to prey on the crypto mining sector. This caused many crypto miners to shut down their operations which resulted in decline in hashrate and hit on profitability followed.
The adjustment of mining difficulty takes place automatically depending upon the computing power generally called a hashrate. Difficulty ensures the timing of a block mining remains stable and close to ten minutes. Increasing the number of miners results in a rise of difficulty while the drop follows the decreasing number of miners over the network.
Source: https://www.thecoinrepublic.com/2022/12/06/crypto-winter-now-disturbing-the-bitcoin-mining/