BTC Mining Difficulty Spikes as Fleeing Miners Settle
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BTC mining difficulty has spiked to 15.55 terahash in light of BTC miners from China settling in more crypto-friendly climates.
Earlier, the mining difficulty of BTC had taken a dive after China announced its crackdown on mining operations. This has proven so significant because miners in China contributed three-quarters to the global hashrate. Now, as many of these miners have relocated and renewed operations, their contribution is once again lifting mining difficulty.
Mining difficulty
Hashrate is the overall computing power on the network, to which miners contribute their capacities in exchange for compensation. As the price of BTC rises, it becomes more lucrative to mine it, which then incentivizes more miners to participate. To compensate for this additional capacity, and remain competitive, proof-of-work protocols make it more difficult to mine a block and receive a reward the more hashpower there is on the network. In this sense, a higher BTC mining difficulty represents higher overall hashpower being contributed by miners.
According to the most recent data from BTC.com, BTC mining difficulty’s recent spike began on July 17. Since then, the BTC ecosystem has witnessed a 13.77% increase in mining difficulty in two consecutive jumps. The second managed to exceed 15 terahash for the first time since mid-June. The next adjustment is expected on August 27, at which point difficulty is expected to rise to 15.63 terahash. Before China started its crackdown on local miners, BTC’s mining difficulty had peaked at 25 terahash.
China crypto mining crackdown
After ordering financial entities to cut ties with cryptocurrency-related companies, Chinese authorities began targeting cryptocurrency mining. As authorities started shuttering operations domestically, domestic miners began fleeing abroad. This led to a dramatic fall in the overall hashrate of BTC.
While formerly contributed 3/4 to the global hashrate, China’s contribution towards BTC mining has reduced to nearly 46%, according to data from Statista. Canada, Kazakhstan, Russia and the United States have picked up the slack, with the latter hosting almost 17% of the global mining hashrate.
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