- Bitcoin mining difficulty dropped by 16 percent, the second biggest level ever seen.
- This follows the declining hashrate of the Bitcoin network.
Bitcoin hashrate, the measure of the computing power on the Bitcoin network, has been in the fall for the past weeks. Just yesterday, Cryptopolitan reported that the estimated computing power in the network dropped further to 107 million Terahashes (TH/s), according to the network explorer, Blockchain.com. Today, Bitcoin mining difficulty posted a negative adjustment as a result of the dropping hashrate.
According to data from Glassnode, an on-chain analytics platform, Bitcoin mining difficulty drops by 16 percent. This represents the second-largest negative adjustment in the network since the history of Bitcoin. The biggest drop was reportedly posted in the past nine years. At the time, the mining difficulty made a negative adjustment of 18 percent.
We just observed the 2nd largest negative #Bitcoin mining difficulty adjustment in history: -16%— glassnode (@glassnode) November 3, 2020
It topped the -15.9% change in March this year.
The only other time difficulty saw a larger downwards adjustment (-18%) was over 9 years ago, in Oct 2011.https://t.co/hXl4n3DAYR pic.twitter.com/7zgwMjNj13
Bitcoin mining difficulty drops to offset the network
The seasonal migration of Bitcoin miners in China had been blamed as a plausible reason behind the dropping of the hashrate. Amidst the significant decrease in hashrate, the Bitcoin mining difficulty had to reduce accordingly to offset the effect of the hashrate on the network. Basically, Bitcoin mining difficulty is a relative measure of competitiveness needed for miners to win block rewards.
As more highly-advanced mining machines (ASIC) are deployed regularly, it becomes easier for miners to win block rewards following the high processing power of the machines. This, among other reasons, causes the Bitcoin network hashrate to rise. However, the Bitcoin network might become insecure as a result, as the programmed mining rate could be altered.
As a solution, the mining difficulty adjustment was introduced to offset the network from such cases. So, whenever the hashrate rises, the mining difficulty increases. However, the mining difficulty will make a negative adjustment if the network hashrate drops. Following the -16 percent decline in mining difficulty, one might easily say that Bitcoin mining has become easier.