The difficulty in mining Bitcoin decreased by a significant amount amid price decrease in the past two weeks. The drop in mining difficulty signals that most of the miners left behind, leaving no strong competition among the community.
On March 26, the blockchain underlying the leading asset witnessed a sudden drop in the mining difficulty and stands at 13.91 trillion. The value was dropped from 16.55 T seen on March 9.
As we know, mining of new bitcoin is done through powerful computers having the largest hashing to solve mathematical problems. To solve these equations, computers need more and more electrical power. The cost of electricity increases when difficulty in executing these problems increases.
The price value of the Bitcoin plunged suddenly, losing half of its value amid the Coronavirus outbreak. Not only cryptocurrencies affected by the crisis, but the traditional assets also dropped unexpectedly due to COVID-19. However, bitcoin is able to recover itself to some extent but it is still behind its reasonable goal.
Individual Miners Leave as Process becomes Unprofitable
At such a low price of the digital coin, people, who are minting new bitcoins, cannot afford as they have to pay big electricity bills. As the process is now unprofitable than the past, many individual miners left the arena. As the miners stop the mining process, the competition among the present individual miners decreases. As the rivalry saw a drop in the last few days, the mining difficulty plunged to a significant amount.
The blockchain is designed in such a way that mining difficulty tunes itself after almost fourteen days when 2,016 blocks complete subsequently. As of March 24, the mining difficulty fell by 15.95 percent. This was the second-largest event in history that competition plunged to such a low level. The first and third-biggest drop in mining difficulty happened in 2011 and 2018 respectively.