Since the introduction of ASIC devices (opens in new tab) back in 2012, mining bitcoin (opens in new tab) has become increasingly challenging but the cryptocurrency has now experienced its biggest mining difficulty decrease since June.
As reported by Coindesk (opens in new tab), Bitcoin's mining difficultly dropped by 16 percent to 16.787tn this week marking the second-largest percentage decrease of all time.
Mining difficulty is determined by the amount of resources required to mine a fresh block of Bitcoin. This relative measure is adjusted approximately every two weeks and when blocks are mined too quickly or too slowly, the difficulty adjusts to bring the speed back in check.
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The recent adjustment to bitcoin's mining difficulty is a direct result of mining companies in China's Sichuan province taking machines offline and moving them to areas with cheaper electricity.
Director of research at HASHR8, John Lee Quigley explained why these companies are moving their mining rigs out of Sichuan province in a recent article (opens in new tab), saying:
“Sichuan has vast hydropower infrastructure. During the rainy season – which spans from roughly April to October – Bitcoin miners secure low electricity rates in the region due to the surplus of hydropower energy generated. However, when the rainy season finishes, rates significantly increase and Bitcoin miners transition their rigs to regions like Xinjiang and Inner Mongolia where competitive electricity rates can be secured.”
This means that mining bitcoin will be significantly more profitable for miners over the next two weeks until the difficult rate is adjusted once again. So if you currently have a mining rig (opens in new tab) that's not being put to use, now would be an excellent time to turn it back on and start mining.
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Via Coindesk (opens in new tab)