Bitcoin Mining Difficulty Sees Biggest 2019 Drop as Hash Rate Spikes

Published at: Nov. 11, 2019

Bitcoin (BTC) mining difficulty adjusted downwards more than at any time since its 2018 price low on Nov. 8, data shows. 

As noted by entrepreneur and cryptocurrency commentator Alistair Milne on Monday, difficulty fell by around 7% after the network’s latest readjustment. 

Difficulty reveals Bitcoin network maneuvering

Mining difficulty refers to the effort required for miners to solve the equations necessary to validate transactions on the Bitcoin network. A higher difficulty implies competition for block rewards is higher, while drops incentivize more participation.

The mechanism functions as a self-stabilizing device for Bitcoin, ensuring network security is sufficient even when price or network activity drops significantly. 

Bitcoin mining difficulty one-year chart. Source: Blockchain

From its recent bottom of 5.1 trillion in December 2018, when BTC/USD traded at $3,100, the difficulty has increased incrementally throughout 2019. In late October, the metric reached an all-time high of 13.7 trillion and has now corrected to 12.7 trillion, data from monitoring resource Blockchain shows.

“Seems to confirm the cost of mining (on average) is ~$8000,” Milne summarized. 

Hash rate retakes 100 billion hashes per second

At the same time, Bitcoin’s network hash rate saw renewed bullish upside on Monday, having similarly seen a period of contraction in recent weeks. 

At press time, hash rate, which is an estimation of how much computing power is dedicated to validating transactions, had passed 100 quintillion hashes per second once again.

Bitcoin network hash rate one-year chart. Source: Blockchain

The move follows news that Argo Blockchain, a major Bitcoin mining provider, brought 500 new Antminer S17 rigs from mining giant Bitmain online over the past week. 

The United Kingdom-based firm now has around 7,000 miners, and by the end of Q1 2020 plans to increase the total to 17,000. 

As Cointelegraph reported, mining companies overall remain buoyant about the future profitability of the sector. Canaan Creative, another significant player, is reportedly set to undergo a $400 million initial public offering, or IPO, this month. 

At the same time, Bitmain is going ahead with the expansion of a Texas mining farm which officials say could ultimately become the largest in the world.

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