- After China's harsh crackdown on cryptocurrency miners, bitcoin mining has grown easier.
- On Saturday, the bitcoin hash rate, or mining difficulty level, fell to its lowest level ever.
- After the difficulty change, a crypto trader claimed that his mining revenue increased by 50%.
Due to China's strong crackdown on the country's crypto operations, bitcoin mining has gotten easier and more profitable, as the pool of miners vying to create tokens has shrunk.
According to data from BTC.com, the level of difficulty for mining bitcoin fell by 28% on Saturday, marking the greatest decline in the network's history.
The network's algorithm adjusts Bitcoin's hash rate, which indicates the compute power required to validate tokens, every two weeks to ensure that miner productivity is balanced.The re-calibration on Saturday made it nearly 30% easier for mining systems to complete blocks and create cryptocurrency, which means that a lot more money could be coming to the miners who stay online.
Crypto trader Scott Melker noted in a tweet on Monday that the difficulty adjustment increased his daily mining revenue by 50%.
"The price of Bitcoin dropped by 50% in a matter of weeks, and China outlawed mining, which accounted for around 60% of the hashrate. but the network is unaffected," stated the "Wolf of All Streets" merchant. "No government bailouts, help, or manipulation are required. It's just the free market at work."
When bitcoin was trading between $50,000 and $60,000 in April, the mining business made a combined profit of $50 million to $60 million each day. The daily aggregate revenue pool has halved, and now stands at roughly $25 million to $30 million per day. However, it is only shared by a limited number of miners, and those who remain online have seen as much as 49% of their competitors go offline, according to the report, according to Glassnode.
This means that following the last difficulty adjustment and in the absence of competition, profitability has nearly doubled, returning to April levels, according to the research.
According to FRNT Financial CEO and cofounder Stéphane Ouellette, the extensive shutdowns of mining operations in China, which account for roughly 65 percent of activity, would have likely resulted in hash-power dips bigger than those seen previously, as well as increased network congestion.
However, he believes that the most visible result of the country's anti-mining actions would be the acceleration of bitcoin mining outside of China.
"The coin's blockchain has not shown any signs of harmful consequences over what has been a 3-month period of sustained pressure on BTC mining in China," Ouellette stated. "In fact, in April, the BTC hash rate reached an all-time high."
That reflects the impact of China's crackdown on mining, which includes announcing that digital currencies can no longer be utilised for commerce and the Inner Mongolia region establishing a hotline to report any remaining crypto businesses.
Bitcoin was last selling at roughly $33,500 on Monday, down nearly 47% from its April high. It's still up 15% so far this year.
