For the first time since November 2021, the bitcoin (BTC) mining difficulty adjustment has declined and corrected by 1.49%. The move follows a series of six consecutive positive difficulty adjustments as mining difficulty and hash rate hit record highs.
The average hash rate over the past two weeks has dropped to 197.19 exahashes per second (EH/s), pushing the average block time past the 10-minute target of 10 minutes 9 seconds. As a result of the difficulty adjustment, miners competing to solve the next valid block are a little easier.
Bitcoin mining difficulty has dropped slightly after an 8-month rise. Source: glass knot
Difficulty adjustment is one of the most outstanding features of the Bitcoin protocol. Every two weeks or confirmed blocks in 2016, the difficulty of extracting a new block is “adjusted” based on the average of the last blocks of 2016, making it easier or harder to extract blocks.
Satoshi Nakamoto wrote in the Bitcoin White Paper: “Proof-of-Work difficulty is determined by a moving average that targets the average number of blocks per hour. If they are generated too quickly, the difficulty increases.”
During the last 2016 blocks, blocks were generated too slowly, averaging 10 minutes and 9 seconds. As a result, the difficulty adjustment is automatically reduced and it will now be slightly easier for miners to solve valid blocks over the next 2016 blocks.
According to Denver Bitcoin, a prominent Bitcoin miner, the -1.49% correction could be the only one in a year.
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The correction is 1.49% lower compared to the mining dark period from May to July 2021, when China’s ban on bitcoin mining caused a catastrophic drop in hash rate. Thankfully, it has risen rapidly in 2021 with a 31% increase as countries like Kazakhstan and Canada filled in the gap by proving the resilience of the network.
The bitcoin mining industry is becoming increasingly competitive and players in the tech industry, including Intel, are looking to slow down the hash rate and introduce their own miners. As Denver Bitcoin mentioned, a hash rate of 300 ECH/s could be an achievable goal in 2022, especially as mining is showing increasing resilience and geographic flexibility.
