The new adjustment in Bitcoin’s mining difficulty represents the biggest drop so far in 2021. The miners of the network expect Taproot to activate in the period of difficulty that is just beginning.
There has been a 16% reduction in Bitcoin’s mining difficulty since an adjustment that occurred on May 29th. Meanwhile, the hash rate continues to drop significantly due to the measures that China is taking to combat cryptocurrency mining.
According to data from Coinwarz, the current difficulty is 21.05 T, which represents a significant reduction, compared to the adjustment on May 13th. At the time, that change was one of the biggest in the history of Bitcoin as it made the difficulty in mining the network reach all-time highs.
The current drop exceeds the 13% drop on May 2nd, and then considered the highest in 2021. That happened after the power outages in China, which disabled an imprecise number of local mining devices.
The Reduction of Bitcoin’s Mining Difficulty Is a Good Thing for Miners
Bitcoin miners consider that the reduction in difficulty is good news. The reason for this is that it is now easier for them to complete the task to get their rewards. Of course, it is necessary to consider the hardware that they use and the hash rate that they can generate.
Bitcoin’s design allows it to produce a block every ten minutes and automatically adjust to the new hash rate every 2,016 blocks. Since May 30th, the network’s hash rate has fallen compared to the previous period. Currently, it is 160.58 EH/s, slightly above the rate of 150.48 EH/s that it recorded during the new adjustment in mining difficulty.
Thanks to this period of difficulty, miners have a new opportunity to continue showing themselves in favor of the activation of the Taproot protocol. Currently, 98.10% of the hash rate is in favor, which suggests that the activation could occur before the next difficulty period of the network.
China Imposes Tighter Restrictions on Bitcoin Mining in the Territory
Concerns about China’s government measures against Bitcoin mining have led to fluctuations in the hash rate of the network. A document that the Inner Mongolia region published includes regulations to punish those mining cryptocurrencies in that territory.
The cities of Xinjiang and Sichuan, in northeast and southwest China, may announce similar measures as they are settlements of large cryptocurrency mining farms. Several factors may have caused the loss of hash rate but this is associated with what is happening in the country. It is important to remember that many of the world’s major Bitcoin mining pools are in China.
Many Chinese miners have disconnected their equipment to migrate to other regions of the Asian country. They may be seeking to settle in the Sichuan region, where the rainy season is about to begin. That would provide them with enough hydroelectric power to operate, without stopping, at a lower price.
By Alexander Salazar
