The difficulty of mining or mining a cryptocurrency is a unit of measurement. It is used to estimate the power and time it takes to hash each block of cryptocurrency. It can be seen that this month, the mining difficulty of bitcoin (BTC) has experienced a decline twice in succession.
Unplugging ASICs Led to Lower Bitcoin Mining Difficulty
The mining difficulty of a cryptocurrency automatically adjusts to the computing power required to register a new block on its blockchain network. This computing power is called hashrate and is expressed in exahash/second (EH/s). That said, bitcoin (BTC) mining difficulty has been steadily rising from November into February.
According to data from Glassnode, this cryptocurrency was at an all-time high of 248 PE/s in February. On March 17, it rose to 216 PE/s . Its mining difficulty had already dropped by 1.5% on March 3, again according to data from the Glassnode information platform. The drop seen on Thursday (the second time this month) is estimated at 0.35% .
Whitt Gibbs, founder and CEO of Compass Mining, has made statements regarding the drop in bitcoin (BTC) mining difficulty. “ This slight drop is likely due to unprofitable miners unplugging ASICs (application-specific integrated circuits). As energy prices increase globally, we are likely to see more ASICs falling off the grid ,” he explained.
A drop linked to the crackdown in Kazakhstan against illegal cryptocurrency mines
Russia is one of the world's largest exporters of fossil fuels. The war between it and Ukraine has led to skyrocketing electricity prices. To cope with rising energy costs in Kazakhstan, the government has decided to crack down on illicit mining . Several miners then had to unplug their machines, because they were working in illicit mines.
On this, Jaran Mellerud, a researcher at Arcane Research which is based in Oslo, said: " I bet Kazakh miners have gone offline due to power shortages and a government crackdown on illegal mining has caused the decline. ". “ The withdrawal of capacity from Kazakhstan is currently limiting bitcoin hashrate growth ,” he added.
Mellerud also explained, “ Using HashrateIndex prices per TH (terahash, a measure of hashrate, computing power on the bitcoin mining network) for medium efficiency rigs, the Kazakh government should have seized around 3 TH /s of mining rigs, equivalent to 1.5% of bitcoin's hashrate. ".
After experiencing a period of steady rise from November to February, the mining difficulty of bitcoin (BTC) is currently declining. It has already fallen twice this month. Concretely, the closure of illicit mines in Kazakhstan due to electricity shortages has helped to lower the difficulty of mining bitcoin (BTC).
Source: CoinDesk
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