Bitcoin Mining Difficulty Fell by 16% For the First Time in 9 Years
On November 3, the Bitcoin mining difficulty was readjusted and slashed 16 percent, a double-digit decrease, and the second-largest difficulty drop in the network’s history. The variable changes depending on the network’s activity, and miner participation directly influences profitability.
Bitcoin is open and everyone can become a miner, and take part in securing the network and confirming transactions. The more the miners, the more the contributed hash rate--computing power, and the more difficult it is to mine BTC. Reflecting demand, the network, roughly after two weeks, re-adjusts the mining difficulty. When prices rise there are more miners and the Bitcoin network algorithm often re-adjust to the upside, the mining difficulty. However, when prices are sliding and weak, miners tend to switch off their gear as it becomes economically unfeasible to mine and commit resources in a loss-making venture. With miners pulling out machines, the mining difficulty is dropped to encourage miners as it becomes easier to mine new coins.
Impact on the BTC Price:
Neutral to Bullish. Bitcoin is flimsy above $13,000. As the network’s mining difficulty drops, it will be easier to mine BTC. This will encourage participation, helping miners to be profitable and hold off their BTC liquidation.
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