Bitcoin mining difficulty is down 7.2%, the biggest drop since July 2021, according to an update posted on BTC.com.
It is the biggest single decline since the network’s hashrate fell by about 28% in the summer of last year as a result of China’s crackdown on mining.
The most recent decline is a reflection of the challenging mining economics businesses have had to deal with recently, as margins have shrunk, power costs have increased, and bitcoin prices have fallen, circumstances that have left some miners broke and drowning in debt.
According to insiders in the industry, unplugged machines are probably to blame for the significant change in difficulty, which refers to the complexity of the computational process used in mining. This was noted by these insiders last week.
According to Jeff Burkey, Foundry’s VP of Business Development, “miners turning off computers that are no longer profitable” is the cause of difficulty drops.
Given how unprofitable some machines are, the industry may experience even greater trouble in the upcoming months, according to William Foxley, director of media and strategy at Compass Mining. According to data from mining software company Luxor, there are an increasing number of ASIC machines flooding the market even though average prices have already fallen by 80% compared to last December.
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