On July 5th, Bitcoin’s mining difficulty experienced a decline, dropping by over 5% to 79.50 terahashes (79.5T), the lowest in this quarter of the year and the largest since March when the difficulty briefly fell below 80 terahashes (80T).
The fall came after an increase from March to May when the network hit its highest-ever mark of 88.10 terahashes. However, since then it has been decreasing gradually.
What is Mining Difficulty?
Mining difficulty is a measure that reflects the computational power required to mine new bitcoins. It adjusts approximately every two weeks to maintain a consistent block time. Historically, the network’s hashrate has shown consistent growth, with few exceptions.
For example, back in 2014, hashrate was about 1.1 gigahashes per second, meaning that nearly any desktop computer could mine Bitcoin profitably, but later on in late 2017 as adoption increased, it reached the terahash level for the first time.
According to estimates from F2Pool an operator of a bitcoin mining pool, under the current difficulty of 79.5 terahashes, ASIC mining rigs with an efficiency of 26 watts per terahash or better can remain profitable if Bitcoin’s price stays above $54,000 and electricity costs $0.07 per kilowatt-hour.
Furthermore, the recent difficulty decrease may temporarily improve profitability for some mining operations. However, if Bitcoin’s price declines, only the most efficient rigs will maintain profitability. Larger mining operations, particularly those benefiting from energy subsidies, are better positioned to adapt to potential price fluctuations.
Also Read: Riot Platforms Sees 19% Bitcoin Mining Boosts in June
