As Miners Relocate Overseas, Bitcoin Mining Difficulty Continues to Surge
With the mining community recovering from the China crackdown, the Bitcoin (BTC) mining difficulty has increased again.
Right after the China crackdown, mining difficulty went down considerably. Before, mining operations over there contributed to ¾ of the international hashrate. However, mining difficulty has incurred a surge that seems to have not subsided since mid-June.
As miners from China are relocating their operations to other countries, the two successive jumps in mining difficulty surpassed 15 terahash (T) with an increase of 13.77% since mid-June. The other increase is likely to take place at the end of August, where terahash (T) is expected to increase by 0.63.
Prior to the crackdown, the peak consisted of 25 terahash (T). The China crackdown decreased competition and lowered the mining difficulty which made for quite lucrative profits for the remaining miners. The US is home to 17% of the global mining hashrate at present, given that China was host to 46% before the crackdown.
Jason Deane, a crypto analyst for Quantum Economics said that the surge in mining difficulty and the adaptation algorithm by the network as a response to the mining difficulty has cut profits for mining Bitcoin (BTC) by 7.3%.
CEO of a New York cryptocurrency group Mike Colyer added that even though new homes are being found for mining equipment in China, an upgraded version of mining rigs could spend the same amount of electricity while doubling the hash power, thereby increasing mining efficiency.
With China’s crackdown due to concerns of electricity consumption and ambitions to follow environmentally conscious projects, the US, Canada, Russia, and Kazakhstan are hosting miners of Bitcoin (BTC). With the rise in hashrate, costs of mining Bitcoin (BTC) are likely to eventually increase as well.
Also read: SEC Chair: More Crypto Regulations Ahead