Data shows that the recent bitcoin hashrate downtrend marked the largest negative adjustment in mining difficulty over the past year.
Bitcoin mining difficulty drops as hashrate continues to decline
According to the latest weekly report from Arcane Research, Thursday will face the biggest mining difficulty since July 2021.
The “mining hashrate” is an indicator that measures the total amount of computing power attached to the bitcoin blockchain.
The higher the value of the metric, the generally better the network’s performance, and the more decentralized the hashrate, the stronger the network’s security.
Hashrate also represents competition between the various miners associated with the chain. As such, when the indicator goes up, the “mining difficulty” also increases.
This happens because the bitcoin network has to maintain a constant block discovery rate. Since more mining power means miners now transact faster, the block rate also increases. And to compensate for this, the network increases the difficulties.
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Naturally, a drop in the hash rate could lead to a negative adjustment in difficulty. The chart below shows how the BTC hash rate has changed over the past year.
Looks like the value of the metric has observed some decline during the last few weeks | Source: Arcane Research's The Weekly Update - Week 28, 2022
As you can see in the graph above, the 7-day average bitcoin mining hash rate has recently gone down and is now around the same level as in March of this year.
The latest drop is so sharp that this Thursday will see the biggest downside adjustment in mining difficulty from a year ago.
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Here’s a table that shows how various miner-related metrics have changed over the past week:
The daily miner revenues seem to have plummeted 4% in the past seven days | Source: Arcane Research's The Weekly Update - Week 28, 2022
The block rate has dropped to 5.53 per hour, which is well below the 6 per hour value required by the network. Because of this, the difficulty is expected to decrease by about 6% in the next adjustment.
btc price
At the time of writing, bitcoin price is floating around $23.6k, up 20% over the past seven days. In the past month, the value of crypto has risen by 15%.
The chart below shows the coin’s price trend over the past five days.
The value of the crypto seems to have sharply risen up during the last couple of days | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Arcane Research