As per the data received from BTC.com, at a block height of 745920,Bitcoin Mining difficulty has fallen by 5.01% constituting the largest decrease in bitcoin in the period of one year. The mining difficulty earlier was 29.153 TH/s which has now been reduced by over 5% to 27.69 TH/s.
Why Bitcoin Mining Difficulty Is Important
Bitcoin or as a matter of fact cryptocurrencies are based upon decentralized Blockchain. The platform uses miners to verify and batch transactions into a block. Mining difficulty in layman terms is the difficulty required to mine the next block. The Bitcoin Mining difficulty is variable and adjusted every two weeks. The bench mark for the difficulty is set in such a way that it requires around 10 minutes to mine the next block.
The system is designed in such a way that when more miners and mining companies enter the fray, the BTC mining difficulty increases. The reverse happens when miners leave the competition, the difficulty is decreased to make it easier to mine the next block and make the process lucrative.
The data received reveals that mining difficulty was decreased by 5%. In other words miners have been going through a tough time during the bearish phase and were finding their mined tokens difficult to be expended.
According to a report by Financial Times, the revenue accrued by miners is at its lowest as compared to last year. Shares of major mining companies and rigs have tanked and mining companies like Marathon Digitalt, Hut 8, and Argo Blockchain are down by around 40%.
There are numerous reports pertaining to the fact that Bitcoin miners are dumping their Bitcoin holdings. The crash of BTC values below $19,000 is also attributed to the dumping of BTC tokens by miners.
The Effects Of Falling Difficulty In Bitcoin Mining
Data reveals that mining revenues are still really low despite an increase in BTC prices. The average earnings of a miner are $18 million, the lowest since December of 2020. Unless the price of BTC rally miners are continuing to face difficulties.