The mining difficulty of Bitcoin (BTC), i.e. the degree of difficulty in mining the market-leading cryptocurrency, has plummeted in recent weeks after the Chinese government cracked down on the domestic mining industry. Since June 17, 2021, however, the level of difficulty has been steadily increasing again.
The reason for this is that some of the Chinese miners – the Middle Kingdom accounts for almost three quarters of the global hashrate of Bitcoin – are slowly moving abroad, which increases the available computing power and consequently the degree of difficulty for mining again. The difficulty has recently increased by 13.77%, which means that 15 Terahash (T) have been posted for the first time since the second week of June. For the next adjustment on August 27, an increase to 15.63 Terahash is forecast accordingly.
Before the Chinese government put pressure on domestic Bitcoin miners, the mining difficulty had reached a maximum of 25 terahash. However, regulatory pressure then reduced the number of operating miners and, with it, competition in validating blocks on the Bitcoin network. As the data from Statista shows, China’s share of the global mini-nig has shrunk to 46% as a result, while the US has absorbed most of this decline with an increase of 17%.
As CNBC reports, Quantum Economics’ crypto expert Jason Deane explains that the recent increase in difficulty for the mining industry means a decrease in profitability after it has now been higher due to lower competition.
Mike Colyer from the Digital Currency Group concludes:
“There are a multitude of mining devices from China that are now looking for a new home.”
In addition, the new generation of mini-nig hardware would work twice as efficiently as the expert thinks with the same power consumption.
Another important point, because one of the reasons for the Chinese government’s action was the massive power consumption of the industry. In addition to the USA, Canada, Kazakhstan and Russia have now emerged as the most popular contact points for Chinese mining companies willing to migrate.