Time to Switch Your BTC Miner Back On? Mining Difficulty on Bitcoin Network Falls
The mining difficulty of the Bitcoin blockchain decreased by more than half a quarter earlier, making BTC mining profitable once again.
Data provided by blockchain analysis site Blockchain.com showed that the Bitcoin network lowered its difficulty by 15 percent, approaching near September 2018 levels.
The percentage was the second lowest drop in Bitcoin’s 10-year history, with the lowest recorded in November 2011.
Online crypto analysts explained that the blockchain adjusted to take into account not only the falling price of Bitcoin but also the decreasing number of crypto miners.
Price ⬇️ -> Hash rate ⬇️ -> Difficulty ⬇️ -> Mining profitability ⬆️ https://t.co/X0q45oISgu
— Matt Odell (@matt_odell) December 3, 2018
The bear crypto market, which persisted for almost the entire year, saw Bitcoin drop to below US$4,000 at US$3290.65 on December 4. Meanwhile, the hash rate on the Bitcoin network fell to only 32 million terahash per second as more and more small-time miners shut down their units.
With less competition and easier mining difficulty, experts believe that Bitcoin miners on the scene could net some profit once again. Not only that, but historical data also suggested that a drop in Bitcoin’s mining difficulty often precedes an increase in the crypto’s prices.
In three of the previous instances, mining difficulty reductions happened in a bear market – like today.
— George Giaglis (@giaglis) December 3, 2018
However, a number of analysts—most notably Autonomous’ global director of FinTech strategy Lex Sokolin—believed the decreasing difficulty could leave the Bitcoin blockchain to 51 percent attacks, in which a group of miners controls the entire network.