Bitcoin mining difficulty is down 7.2%, the biggest drop since July 2021, according to an update posted on BTC.com.
It's the largest single step down since a nearly 28% plunge following China’s crackdown on mining in the summer of last year, which caused the network’s hashrate to plummet.
The most recent decrease reflects the tough mining economics companies have faced in the past few months as margins have tightened along with rising power costs and declining bitcoin prices. Conditions that have left some miners cash-strapped and buried in debt.
The significant change in difficulty — which refers to the complexity of the computational process used in mining — is likely due to unplugged machines, as noted by industry insiders last week.
A "difficulty drop is [the] result of miners shutting off machines that are no longer profitable," said Jeff Burkey, VP of Business Development at Foundry, last week.
The industry could see difficulty drop further in coming months considering how unprofitable some machines are, said William Foxley, Compass Mining's media and strategy director. More and more ASIC machines are flooding the market even as average prices have already crashed some 80% compared to last December, according to data from mining software firm Luxor.
Mining difficulty adjusts about every two weeks (or every 2,016 blocks) in sync with the network's hashrate.
Ethan Vera, COO of Luxor, said last week a significant drop could give some breathing room to troubled miners that can “weather the hashprice environment with low-cost operations and high-efficiency machines.”
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