Bitcoin’s Mining Difficulty Fell By 3.6% In December

Bitcoin’s Mining Difficulty Fell By 3.6% In December

In its latest two-week adjustment, the mining difficulty rate of Bitcoin has dropped by 3.6%, while revenue margin for miners went up by 0.9% in the last month. The drop in hashrate was mainly due to miners across North America halting operations during severe winter storms. 

After a winter storm that caused havoc in the United States and Canada forced miners to halt their operations, the mining difficulty rate of Bitcoin (BTC) has come down 3.6% in its latest adjustment. Mining difficulty refers to the complexity behind the computational process required to create a block and mine one Bitcoin. This rate is adjusted every two weeks, or every 2,016 blocks, based on the average time taken to validate transactions and create a block on the Bitcoin network. 

According to data collected by BTC.com, mining difficulty came in at 34.09 trillion hashes at block height 770,112 – which is a measurement of the time needed to create a block and distance of the entire network – in Tuesday’s biweekly adjustment, compared to a 3.27% rise in its previous adjustment on December 19. Bitcoin’s network hashrate – the computational power required to mine one BTC – fell from 245 exahashes per second (EH/s) down to 222 EH/s last week, and went back up to 256 EH/s on Tuesday. Meanwhile, month-over-month block revenue went up by 0.9% in December, generating a combined $476.7 million in revenue for miners. 

Most of the profits generated by miners came from block reward subsidies ($467.34 million), and the rest from network transaction fees ($9.31 million). This has also resulted in Bitcoin’s transaction fee dropping to around 2%. According to data sourced by BitInfoCharts, the profitability rate of mining Bitcoin stands at $0.058 per terahash per second in the last 24 hours, down from $0.233 per TH/s at this time last year. Current reading shows that mining difficulty is nearly 40% higher this time compared to January 2022, when the difficulty reading was at 24.37 trillion hashes. Data from Blockchain.com shows Bitcoin’s seven-day average hashrate at 256.7 EH/s on Monday, down from its previous seven-day average of 245.1 EH/s on December 19. 

In the week leading up to Christmas, Bitcoin’s mean hashrate dropped by 30% from 230 EH/s to 155 EH/s, while on December 25, the computational power rate which typically hovers around 255 to 300 EH/s dropped to around 170.60 EH/s. This was after miners in the United States, which contributes 37.84% of the blockchain network’s global hashrate, decided to halt all operations during the blizzard to stabilise the country’s national grid and help heat people’s homes. 

Since reaching an all time of high of $69,000 on November 10, 2021, Bitcoin has lost over 75% of its value. The crypto winter which continues to affect the markets have led to reduced revenue for miners, while the conflict between Russia and Ukraine has resulted in electricity and production costs rising. As this downtrend continued, many bitcoin miners went into deeper debts, with some reporting negative cash flow while having to continue operating their high-energy consuming mining rigs. Many prominent mining firms including Core Scientific – a company responsible for 10% of Bitcoin’s global hashrate, Riot Blockchain, Argo Blockchain, Compute North and Greenridge have filed for bankruptcy after facing liquidity crunches last year. 

On a positive note, Bitcoin miners have generated about 6 times the revenues of Ethereum stakers in December. At the time of writing, BTC, the world’s largest cryptocurrency by market value, is trading at $16,842 – up by 0.7% in the last 24-hours. 

Also Check: Core Scientific Shuts Down Celsius Network’s Mining Rigs 

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