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Bitcoin (BTC) Mining Difficulty Drops with the Beginning of December
As Bitcoin is dropping in the market, the hash rates are dropping as well, which means that the mining difficulty for Bitcoin is also dropping as a consequence.
The mining difficulty for BTC started to drop in August with the declining market on the head with Bitcoin dips, however, the difficulty is dropping further in December.
As much as the dropping difficulty is affecting the miners as many minor players will have to leave the game of mining BTC as creating new blocks is getting more and more expensive from month to month, Bitcoin is not affected with the state of the hash rates that are still dropping in December.
Bitcoin Miners Could Be Affected with the Drop of the Hash Rate, Bitcoin Out of Trouble
Since Bitcoin is dropping at an accelerated rate for the past 30 days, the miners are finally feeling it. Especially with BTC going below 4,000$ once again, still trading far from 3,000$, Bitcoin mining might not be profitable.
This is the case because Bitcoin mining is highly competitive given the fact that Bitcoin as the original cryptocurrency works on Proof of Work protocol which determines the rules for mining of BTC, thus resulting in creating new blocks.
By solving mathematical equations, miners are validating transactions on the blockchain, at the same time creating new blocks in the network and thus receiving rewards in form of Bitcoin units they can later store, exchange or spend.
Miners are the spinning wheel of Bitcoin network, however, since Bitcoin works on PoW, mining for BTC is a bit pricey, and perhaps more than pricey for an average miner. This is the case because Proof of Work is not energy efficient thus spending a lot of electric energy for mining in exchange for rewarding miners with Bitcoin.
The price of electric bills and the equipment needed for mining of BTC can go up to 5,000$ surpasses the current price of a single Bitcoin, as BTC is trading below 4,000$ dropping over -30% in the course of the last month.
That is how a lot of miners who can’t afford to mine for the top crypto anymore could decide to desert their business.
Bitcoin won’t be affected even with the miners leaving the network as it is made with difficulty adjustment aspect.
The Cost of Mining Equipment Drops, Bitcoin Price Still Too Low to Cover the Costs
While the price of Antminer S9 is declining once again in the course of the last several months, so miners who found the mining equipment perhaps too pricey can now afford more advanced mining devices.
However, although the mining equipment is somewhat becoming more available and less expensive, it is presumed that the price of Bitcoin is not meeting the cost of creating new blocks, which might once again force a portion of miners to leave the mining of BTC.
This can’t affect the network of BTC as Bitcoin is made to adjust the system in case of departing mining cells, meaning that the system adjusts every two weeks in order to try and synchronize the block writing time and try to keep it to 10 minutes.